Correlation Between Guangzhou Jointas and Hengli Petrochemical
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and Hengli Petrochemical Co, you can compare the effects of market volatilities on Guangzhou Jointas and Hengli Petrochemical 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 Guangzhou Jointas with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and Hengli Petrochemical.
Diversification Opportunities for Guangzhou Jointas and Hengli Petrochemical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Hengli is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas Chemical and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Guangzhou Jointas 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 Guangzhou Jointas Chemical are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Guangzhou Jointas i.e., Guangzhou Jointas and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and Hengli Petrochemical
Assuming the 90 days trading horizon Guangzhou Jointas Chemical is expected to under-perform the Hengli Petrochemical. In addition to that, Guangzhou Jointas is 2.96 times more volatile than Hengli Petrochemical Co. It trades about -0.14 of its total potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.34 per unit of volatility. If you would invest 1,412 in Hengli Petrochemical Co on September 27, 2024 and sell it today you would earn a total of 128.00 from holding Hengli Petrochemical Co or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Jointas Chemical vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Guangzhou Jointas |
| Hengli Petrochemical |
Guangzhou Jointas and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and Hengli Petrochemical
The main advantage of trading using opposite Guangzhou Jointas and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Shandong Gold Mining | Guangzhou Jointas vs. Rongsheng Petrochemical Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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