Correlation Between China Petrochemical and Shuang Bang
Can any of the company-specific risk be diversified away by investing in both China Petrochemical and Shuang Bang 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 Shuang Bang 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 Shuang Bang Industrial, you can compare the effects of market volatilities on China Petrochemical and Shuang Bang 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 Shuang Bang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petrochemical and Shuang Bang.
Diversification Opportunities for China Petrochemical and Shuang Bang
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Shuang is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Petrochemical Developmen and Shuang Bang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuang Bang Industrial 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 Shuang Bang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuang Bang Industrial has no effect on the direction of China Petrochemical i.e., China Petrochemical and Shuang Bang go up and down completely randomly.
Pair Corralation between China Petrochemical and Shuang Bang
If you would invest 1,859 in Shuang Bang Industrial on August 26, 2024 and sell it today you would lose (79.00) from holding Shuang Bang Industrial or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petrochemical Developmen vs. Shuang Bang Industrial
Performance |
| Timeline |
| China Petrochemical |
| Shuang Bang Industrial |
China Petrochemical and Shuang Bang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petrochemical and Shuang Bang
The main advantage of trading using opposite China Petrochemical and Shuang Bang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petrochemical position performs unexpectedly, Shuang Bang 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 Shuang Bang will offset losses from the drop in Shuang Bang's long position.| China Petrochemical vs. USI Corp | China Petrochemical vs. Grand Pacific Petrochemical | China Petrochemical vs. Taiwan Styrene Monomer | China Petrochemical vs. China Steel Corp |
| Shuang Bang vs. Delta Electronics | Shuang Bang vs. China Steel Chemical | Shuang Bang vs. Hota Industrial Mfg | Shuang Bang vs. Ruentex Development 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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