Correlation Between Tongxing Environmental and Maoming Petro
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By analyzing existing cross correlation between Tongxing Environmental Protection and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Tongxing Environmental 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 Tongxing Environmental with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and Maoming Petro.
Diversification Opportunities for Tongxing Environmental and Maoming Petro
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongxing and Maoming is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect 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 Tongxing Environmental 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 Tongxing Environmental Protection 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 Tongxing Environmental i.e., Tongxing Environmental and Maoming Petro go up and down completely randomly.
Pair Corralation between Tongxing Environmental and Maoming Petro
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to under-perform the Maoming Petro. In addition to that, Tongxing Environmental is 1.25 times more volatile than Maoming Petro Chemical Shihua. It trades about -0.26 of its total potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.32 per unit of volatility. If you would invest 428.00 in Maoming Petro Chemical Shihua on October 12, 2024 and sell it today you would lose (71.00) from holding Maoming Petro Chemical Shihua or give up 16.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Tongxing Environmental |
| Maoming Petro Chemical |
Tongxing Environmental and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and Maoming Petro
The main advantage of trading using opposite Tongxing Environmental and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental 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 Tongxing Environmental Protection 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.
| Maoming Petro vs. Tongxing Environmental Protection | Maoming Petro vs. Innovative Medical Management | Maoming Petro vs. Xiangyu Medical Co | Maoming Petro vs. Shandong Iron and |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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