Correlation Between Rongsheng Petrochemical and Orinko Advanced
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Orinko Advanced Plastics, you can compare the effects of market volatilities on Rongsheng Petrochemical and Orinko Advanced 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 Orinko Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Orinko Advanced.
Diversification Opportunities for Rongsheng Petrochemical and Orinko Advanced
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Orinko is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Orinko Advanced Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orinko Advanced Plastics 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 Orinko Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orinko Advanced Plastics has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Orinko Advanced go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Orinko Advanced
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 2.19 times less return on investment than Orinko Advanced. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.55 times less risky than Orinko Advanced. It trades about 0.04 of its potential returns per unit of risk. Orinko Advanced Plastics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 913.00 in Orinko Advanced Plastics on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Orinko Advanced Plastics or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Orinko Advanced Plastics
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Orinko Advanced Plastics |
Rongsheng Petrochemical and Orinko Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Orinko Advanced
The main advantage of trading using opposite Rongsheng Petrochemical and Orinko Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Orinko Advanced 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 Orinko Advanced will offset losses from the drop in Orinko Advanced'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 |
| Orinko Advanced vs. Sinomach General Machinery | Orinko Advanced vs. Xinjiang Communications Construction | Orinko Advanced vs. Jilin Jlu Communication | Orinko Advanced vs. Anhui Huilong Agricultural |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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