Correlation Between Guizhou Chanhen and Shenyang Chemical
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Shenyang Chemical Industry, you can compare the effects of market volatilities on Guizhou Chanhen and Shenyang Chemical 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 Guizhou Chanhen with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Shenyang Chemical.
Diversification Opportunities for Guizhou Chanhen and Shenyang Chemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guizhou and Shenyang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Guizhou Chanhen 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 Guizhou Chanhen Chemical are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Shenyang Chemical
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to generate 0.85 times more return on investment than Shenyang Chemical. However, Guizhou Chanhen Chemical is 1.18 times less risky than Shenyang Chemical. It trades about 0.14 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about 0.11 per unit of risk. If you would invest 2,125 in Guizhou Chanhen Chemical on September 1, 2024 and sell it today you would earn a total of 177.00 from holding Guizhou Chanhen Chemical or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Shenyang Chemical |
Guizhou Chanhen and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Shenyang Chemical
The main advantage of trading using opposite Guizhou Chanhen and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Guizhou Chanhen vs. GKHT Medical Technology | Guizhou Chanhen vs. Shanghai Jinfeng Wine | Guizhou Chanhen vs. Guangdong Qunxing Toys | Guizhou Chanhen vs. Ningbo David Medical |
| Shenyang Chemical vs. Yindu Kitchen Equipment | Shenyang Chemical vs. Dymatic Chemicals | Shenyang Chemical vs. Jahen Household Products | Shenyang Chemical vs. China National Software |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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