Correlation Between Shandong Rike and Xinxiang Chemical
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By analyzing existing cross correlation between Shandong Rike Chemical and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Shandong Rike and Xinxiang 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 Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Xinxiang Chemical.
Diversification Opportunities for Shandong Rike and Xinxiang Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Xinxiang is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber 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 Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Shandong Rike i.e., Shandong Rike and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Shandong Rike and Xinxiang Chemical
Assuming the 90 days trading horizon Shandong Rike is expected to generate 1.1 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, Shandong Rike Chemical is 1.09 times less risky than Xinxiang Chemical. It trades about 0.11 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 301.00 in Xinxiang Chemical Fiber on October 18, 2024 and sell it today you would earn a total of 105.00 from holding Xinxiang Chemical Fiber or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Shandong Rike Chemical |
| Xinxiang Chemical Fiber |
Shandong Rike and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Xinxiang Chemical
The main advantage of trading using opposite Shandong Rike and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Xinxiang 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| Shandong Rike vs. Guizhou BroadcastingTV Info | Shandong Rike vs. Sichuan Fulin Transportation | Shandong Rike vs. Hunan TV Broadcast | Shandong Rike vs. Tongyu Communication |
| Xinxiang Chemical vs. Shenzhen Noposion Agrochemicals | Xinxiang Chemical vs. Jilin Chemical Fibre | Xinxiang Chemical vs. Qumei Furniture Group | Xinxiang Chemical vs. Shandong Rike Chemical |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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