Correlation Between Shandong Rike and Shenyang Chemical
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By analyzing existing cross correlation between Shandong Rike Chemical and Shenyang Chemical Industry, you can compare the effects of market volatilities on Shandong Rike and Shenyang Chemical 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 Shandong Rike with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Shenyang Chemical.
Diversification Opportunities for Shandong Rike and Shenyang Chemical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Shenyang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Shandong Rike 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 Shandong Rike Chemical are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Shandong Rike i.e., Shandong Rike and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Shandong Rike and Shenyang Chemical
Assuming the 90 days trading horizon Shandong Rike Chemical is expected to generate 0.98 times more return on investment than Shenyang Chemical. However, Shandong Rike Chemical is 1.02 times less risky than Shenyang Chemical. It trades about 0.0 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.02 per unit of risk. If you would invest 696.00 in Shandong Rike Chemical on November 2, 2024 and sell it today you would lose (133.00) from holding Shandong Rike Chemical or give up 19.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Shandong Rike Chemical |
| Shenyang Chemical |
Shandong Rike and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Shenyang Chemical
The main advantage of trading using opposite Shandong Rike and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Shandong Rike vs. Zhengping RoadBridge Constr | Shandong Rike vs. Chengdu Xinzhu RoadBridge | Shandong Rike vs. Chengtun Mining Group | Shandong Rike vs. Zhengzhou Coal Mining |
| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Runjian Communication Co | Shenyang Chemical vs. Guangdong Jinma Entertainment | Shenyang Chemical vs. Fiberhome Telecommunication Technologies |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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