Correlation Between Shandong Ruifeng and Chongqing Road
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Chongqing Road Bridge, you can compare the effects of market volatilities on Shandong Ruifeng and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Chongqing Road.
Diversification Opportunities for Shandong Ruifeng and Chongqing Road
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Chongqing is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Chongqing Road go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Chongqing Road
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.62 times more return on investment than Chongqing Road. However, Shandong Ruifeng is 1.62 times more volatile than Chongqing Road Bridge. It trades about 0.14 of its potential returns per unit of risk. Chongqing Road Bridge is currently generating about -0.05 per unit of risk. If you would invest 991.00 in Shandong Ruifeng Chemical on August 29, 2024 and sell it today you would earn a total of 148.00 from holding Shandong Ruifeng Chemical or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Chongqing Road Bridge
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Chongqing Road Bridge |
Shandong Ruifeng and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Chongqing Road
The main advantage of trading using opposite Shandong Ruifeng and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.| Shandong Ruifeng vs. Bloomage Biotechnology Corp | Shandong Ruifeng vs. Unigroup Guoxin Microelectronics | Shandong Ruifeng vs. Epoxy Base Electronic | Shandong Ruifeng vs. Techshine Electronics Co |
| Chongqing Road vs. Industrial and Commercial | Chongqing Road vs. China Construction Bank | Chongqing Road vs. Agricultural Bank of | Chongqing Road vs. Bank of China |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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