Correlation Between Shandong Rike and Jiangxi Hengda
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By analyzing existing cross correlation between Shandong Rike Chemical and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Shandong Rike and Jiangxi Hengda 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 Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Jiangxi Hengda.
Diversification Opportunities for Shandong Rike and Jiangxi Hengda
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Jiangxi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi 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 Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Shandong Rike i.e., Shandong Rike and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Shandong Rike and Jiangxi Hengda
Assuming the 90 days trading horizon Shandong Rike Chemical is expected to under-perform the Jiangxi Hengda. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Rike Chemical is 1.0 times less risky than Jiangxi Hengda. The stock trades about -0.08 of its potential returns per unit of risk. The Jiangxi Hengda Hi Tech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 448.00 in Jiangxi Hengda Hi Tech on November 5, 2024 and sell it today you would earn a total of 43.00 from holding Jiangxi Hengda Hi Tech or generate 9.6% 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. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Shandong Rike Chemical |
| Jiangxi Hengda Hi |
Shandong Rike and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Jiangxi Hengda
The main advantage of trading using opposite Shandong Rike and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Shandong Rike vs. Tianjin Ruixin Technology | Shandong Rike vs. Soyea Technology Co | Shandong Rike vs. UCloud Technology Co | Shandong Rike vs. Fibocom Wireless |
| Jiangxi Hengda vs. Ping An Insurance | Jiangxi Hengda vs. Shenyang Chemical Industry | Jiangxi Hengda vs. Shenzhen Noposion Agrochemicals | Jiangxi Hengda vs. Southchip Semiconductor Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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