Correlation Between Shandong Ruifeng and Aba Chemicals
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Aba Chemicals Corp, you can compare the effects of market volatilities on Shandong Ruifeng and Aba Chemicals 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 Ruifeng with a short position of Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Aba Chemicals.
Diversification Opportunities for Shandong Ruifeng and Aba Chemicals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Aba is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp and Shandong Ruifeng 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 Ruifeng Chemical are associated (or correlated) with Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Aba Chemicals go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Aba Chemicals
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to under-perform the Aba Chemicals. In addition to that, Shandong Ruifeng is 1.38 times more volatile than Aba Chemicals Corp. It trades about -0.26 of its total potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.24 per unit of volatility. If you would invest 791.00 in Aba Chemicals Corp on October 25, 2024 and sell it today you would lose (163.00) from holding Aba Chemicals Corp or give up 20.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Aba Chemicals Corp
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Aba Chemicals Corp |
Shandong Ruifeng and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Aba Chemicals
The main advantage of trading using opposite Shandong Ruifeng and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| Shandong Ruifeng vs. Guocheng Mining Co | Shandong Ruifeng vs. Keda Clean Energy | Shandong Ruifeng vs. Xinjiang Baodi Mining | Shandong Ruifeng vs. Tibet Huayu Mining |
| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Rongsheng Petrochemical Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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