Correlation Between Sichuan Yahua and Maoming Petro
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Sichuan Yahua and Maoming Petro 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 Sichuan Yahua with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Maoming Petro.
Diversification Opportunities for Sichuan Yahua and Maoming Petro
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sichuan and Maoming is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical and Sichuan Yahua 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 Sichuan Yahua Industrial are associated (or correlated) with Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Maoming Petro go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Maoming Petro
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 1.81 times more return on investment than Maoming Petro. However, Sichuan Yahua is 1.81 times more volatile than Maoming Petro Chemical Shihua. It trades about 0.32 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about 0.09 per unit of risk. If you would invest 1,135 in Sichuan Yahua Industrial on November 7, 2024 and sell it today you would earn a total of 181.00 from holding Sichuan Yahua Industrial or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Yahua Industrial vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Sichuan Yahua Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Maoming Petro Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sichuan Yahua and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Maoming Petro
The main advantage of trading using opposite Sichuan Yahua and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.The idea behind Sichuan Yahua Industrial and Maoming Petro Chemical Shihua pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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