Correlation Between Rongsheng Petrochemical and Shanghai Yaohua
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Shanghai Yaohua Pilkington, you can compare the effects of market volatilities on Rongsheng Petrochemical and Shanghai Yaohua 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 Shanghai Yaohua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Shanghai Yaohua.
Diversification Opportunities for Rongsheng Petrochemical and Shanghai Yaohua
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Shanghai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Shanghai Yaohua Pilkington in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaohua Pilk 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 Shanghai Yaohua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaohua Pilk has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Shanghai Yaohua go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Shanghai Yaohua
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 3.49 times less return on investment than Shanghai Yaohua. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 2.4 times less risky than Shanghai Yaohua. It trades about 0.06 of its potential returns per unit of risk. Shanghai Yaohua Pilkington is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Shanghai Yaohua Pilkington on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Shanghai Yaohua Pilkington or generate 5.88% 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. Shanghai Yaohua Pilkington
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Shanghai Yaohua Pilk |
Rongsheng Petrochemical and Shanghai Yaohua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Shanghai Yaohua
The main advantage of trading using opposite Rongsheng Petrochemical and Shanghai Yaohua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Shanghai Yaohua 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 Shanghai Yaohua will offset losses from the drop in Shanghai Yaohua'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 |
| Shanghai Yaohua vs. Zijin Mining Group | Shanghai Yaohua vs. Wanhua Chemical Group | Shanghai Yaohua vs. Baoshan Iron Steel | Shanghai Yaohua 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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