Correlation Between Rongsheng Petrochemical and GRIPM Advanced
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and GRIPM Advanced Materials, you can compare the effects of market volatilities on Rongsheng Petrochemical and GRIPM 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 GRIPM Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and GRIPM Advanced.
Diversification Opportunities for Rongsheng Petrochemical and GRIPM Advanced
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and GRIPM is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and GRIPM Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIPM Advanced Materials 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 GRIPM Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIPM Advanced Materials has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and GRIPM Advanced go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and GRIPM Advanced
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the GRIPM Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 1.99 times less risky than GRIPM Advanced. The stock trades about -0.04 of its potential returns per unit of risk. The GRIPM Advanced Materials is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,878 in GRIPM Advanced Materials on August 29, 2024 and sell it today you would earn a total of 263.00 from holding GRIPM Advanced Materials or generate 9.14% 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. GRIPM Advanced Materials
Performance |
| Timeline |
| Rongsheng Petrochemical |
| GRIPM Advanced Materials |
Rongsheng Petrochemical and GRIPM Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and GRIPM Advanced
The main advantage of trading using opposite Rongsheng Petrochemical and GRIPM Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, GRIPM 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 GRIPM Advanced will offset losses from the drop in GRIPM 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 |
| GRIPM Advanced vs. Zijin Mining Group | GRIPM Advanced vs. Wanhua Chemical Group | GRIPM Advanced vs. Baoshan Iron Steel | GRIPM Advanced vs. Shandong Gold Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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