Correlation Between Rongsheng Petrochemical and Gansu Jiu
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Gansu Jiu Steel, you can compare the effects of market volatilities on Rongsheng Petrochemical and Gansu Jiu 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 Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Gansu Jiu.
Diversification Opportunities for Rongsheng Petrochemical and Gansu Jiu
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Gansu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Gansu Jiu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Jiu Steel 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 Gansu Jiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Jiu Steel has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Gansu Jiu go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Gansu Jiu
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Gansu Jiu. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 2.17 times less risky than Gansu Jiu. The stock trades about -0.08 of its potential returns per unit of risk. The Gansu Jiu Steel is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Gansu Jiu Steel on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Gansu Jiu Steel or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Gansu Jiu Steel
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Gansu Jiu Steel |
Rongsheng Petrochemical and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Gansu Jiu
The main advantage of trading using opposite Rongsheng Petrochemical and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Gansu Jiu 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 Gansu Jiu will offset losses from the drop in Gansu Jiu's long position.| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical vs. Shandong Gold Mining |
| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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