Correlation Between Shandong Rike and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Shandong Rike Chemical and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Shandong Rike and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Guangzhou Ruoyuchen.
Diversification Opportunities for Shandong Rike and Guangzhou Ruoyuchen
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Guangzhou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Shandong Rike i.e., Shandong Rike and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Shandong Rike and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Shandong Rike is expected to generate 20.71 times less return on investment than Guangzhou Ruoyuchen. But when comparing it to its historical volatility, Shandong Rike Chemical is 1.66 times less risky than Guangzhou Ruoyuchen. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Ruoyuchen Information is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,254 in Guangzhou Ruoyuchen Information on October 11, 2024 and sell it today you would earn a total of 528.00 from holding Guangzhou Ruoyuchen Information or generate 23.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Shandong Rike Chemical |
| Guangzhou Ruoyuchen |
Shandong Rike and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Guangzhou Ruoyuchen
The main advantage of trading using opposite Shandong Rike and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| Shandong Rike vs. Great Sun Foods Co | Shandong Rike vs. XinJiang GuoTong Pipeline | Shandong Rike vs. Zhejiang Kingland Pipeline | Shandong Rike vs. Changchun Engley Automobile |
| Guangzhou Ruoyuchen vs. Anhui Gujing Distillery | Guangzhou Ruoyuchen vs. Hangzhou Gaoxin Rubber | Guangzhou Ruoyuchen vs. Sichuan Jinshi Technology | Guangzhou Ruoyuchen vs. Cansino Biologics |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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