Correlation Between Rongsheng Petrochemical and Hangzhou Huawang
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Hangzhou Huawang New, you can compare the effects of market volatilities on Rongsheng Petrochemical and Hangzhou Huawang 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 Hangzhou Huawang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Hangzhou Huawang.
Diversification Opportunities for Rongsheng Petrochemical and Hangzhou Huawang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Hangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Hangzhou Huawang New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Huawang New 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 Hangzhou Huawang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Huawang New has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Hangzhou Huawang go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Hangzhou Huawang
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to generate 0.78 times more return on investment than Hangzhou Huawang. However, Rongsheng Petrochemical Co is 1.28 times less risky than Hangzhou Huawang. It trades about 0.02 of its potential returns per unit of risk. Hangzhou Huawang New is currently generating about -0.11 per unit of risk. If you would invest 939.00 in Rongsheng Petrochemical Co on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Rongsheng Petrochemical Co or generate 0.53% 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. Hangzhou Huawang New
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Hangzhou Huawang New |
Rongsheng Petrochemical and Hangzhou Huawang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Hangzhou Huawang
The main advantage of trading using opposite Rongsheng Petrochemical and Hangzhou Huawang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Hangzhou Huawang 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 Hangzhou Huawang will offset losses from the drop in Hangzhou Huawang'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 |
| Hangzhou Huawang vs. Shanghai Rongtai Health | Hangzhou Huawang vs. Nantong Haixing Electronics | Hangzhou Huawang vs. Unigroup Guoxin Microelectronics | Hangzhou Huawang vs. Integrated Electronic Systems |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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