Correlation Between China Petrochemical and Hsing Ta
Can any of the company-specific risk be diversified away by investing in both China Petrochemical and Hsing Ta at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Petrochemical and Hsing Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Petrochemical Development and Hsing Ta Cement, you can compare the effects of market volatilities on China Petrochemical and Hsing Ta 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 China Petrochemical with a short position of Hsing Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petrochemical and Hsing Ta.
Diversification Opportunities for China Petrochemical and Hsing Ta
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Hsing is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Petrochemical Developmen and Hsing Ta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsing Ta Cement and China 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 China Petrochemical Development are associated (or correlated) with Hsing Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsing Ta Cement has no effect on the direction of China Petrochemical i.e., China Petrochemical and Hsing Ta go up and down completely randomly.
Pair Corralation between China Petrochemical and Hsing Ta
Assuming the 90 days trading horizon China Petrochemical Development is expected to under-perform the Hsing Ta. In addition to that, China Petrochemical is 1.66 times more volatile than Hsing Ta Cement. It trades about -0.03 of its total potential returns per unit of risk. Hsing Ta Cement is currently generating about 0.02 per unit of volatility. If you would invest 1,790 in Hsing Ta Cement on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Hsing Ta Cement or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
China Petrochemical Developmen vs. Hsing Ta Cement
Performance |
| Timeline |
| China Petrochemical |
| Hsing Ta Cement |
China Petrochemical and Hsing Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petrochemical and Hsing Ta
The main advantage of trading using opposite China Petrochemical and Hsing Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petrochemical position performs unexpectedly, Hsing Ta 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 Hsing Ta will offset losses from the drop in Hsing Ta's long position.| China Petrochemical vs. Basso Industry Corp | China Petrochemical vs. Chung Hsin Electric Machinery | China Petrochemical vs. TYC Brother Industrial | China Petrochemical vs. TECO Electric Machinery |
| Hsing Ta vs. Universal Cement Corp | Hsing Ta vs. Chia Hsin Cement | Hsing Ta vs. AGV Products Corp | Hsing Ta vs. Grand Pacific Petrochemical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |