Correlation Between Rongsheng Petrochemical and Rising Nonferrous
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Rising Nonferrous Metals, you can compare the effects of market volatilities on Rongsheng Petrochemical and Rising Nonferrous and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rongsheng Petrochemical with a short position of Rising Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Rising Nonferrous.
Diversification Opportunities for Rongsheng Petrochemical and Rising Nonferrous
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Rising is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals and Rongsheng Petrochemical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rongsheng Petrochemical Co are associated (or correlated) with Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Rising Nonferrous go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Rising Nonferrous
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to generate 0.87 times more return on investment than Rising Nonferrous. However, Rongsheng Petrochemical Co is 1.15 times less risky than Rising Nonferrous. It trades about -0.02 of its potential returns per unit of risk. Rising Nonferrous Metals is currently generating about -0.02 per unit of risk. If you would invest 1,265 in Rongsheng Petrochemical Co on September 3, 2024 and sell it today you would lose (311.00) from holding Rongsheng Petrochemical Co or give up 24.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Rising Nonferrous Metals
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Rising Nonferrous Metals |
Rongsheng Petrochemical and Rising Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Rising Nonferrous
The main advantage of trading using opposite Rongsheng Petrochemical and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Rising Nonferrous can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical vs. Hoshine Silicon Ind |
| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Rongsheng Petrochemical Co | Rising Nonferrous vs. Hoshine Silicon Ind |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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