Correlation Between Bosera CMSK and Hengli Petrochemical
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By analyzing existing cross correlation between Bosera CMSK Industrial and Hengli Petrochemical Co, you can compare the effects of market volatilities on Bosera CMSK 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 Bosera CMSK with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosera CMSK and Hengli Petrochemical.
Diversification Opportunities for Bosera CMSK and Hengli Petrochemical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bosera and Hengli is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bosera CMSK Industrial and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Bosera CMSK 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 Bosera CMSK Industrial 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 Bosera CMSK i.e., Bosera CMSK and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Bosera CMSK and Hengli Petrochemical
Assuming the 90 days trading horizon Bosera CMSK Industrial is expected to generate 1.25 times more return on investment than Hengli Petrochemical. However, Bosera CMSK is 1.25 times more volatile than Hengli Petrochemical Co. It trades about 0.41 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about -0.01 per unit of risk. If you would invest 208.00 in Bosera CMSK Industrial on November 7, 2024 and sell it today you would earn a total of 16.00 from holding Bosera CMSK Industrial or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosera CMSK Industrial vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Bosera CMSK Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Hengli Petrochemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bosera CMSK and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosera CMSK and Hengli Petrochemical
The main advantage of trading using opposite Bosera CMSK and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosera CMSK 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.The idea behind Bosera CMSK Industrial and Hengli Petrochemical Co 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.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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