Correlation Between Shandong Ruifeng and Bank of Chengdu
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Bank of Chengdu, you can compare the effects of market volatilities on Shandong Ruifeng and Bank of Chengdu 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 Bank of Chengdu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Bank of Chengdu.
Diversification Opportunities for Shandong Ruifeng and Bank of Chengdu
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shandong and Bank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Bank of Chengdu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Chengdu 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 Bank of Chengdu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Chengdu has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Bank of Chengdu go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Bank of Chengdu
Assuming the 90 days trading horizon Shandong Ruifeng is expected to generate 1.4 times less return on investment than Bank of Chengdu. In addition to that, Shandong Ruifeng is 2.64 times more volatile than Bank of Chengdu. It trades about 0.02 of its total potential returns per unit of risk. Bank of Chengdu is currently generating about 0.07 per unit of volatility. If you would invest 1,236 in Bank of Chengdu on October 25, 2024 and sell it today you would earn a total of 403.00 from holding Bank of Chengdu or generate 32.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Bank of Chengdu
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Bank of Chengdu |
Shandong Ruifeng and Bank of Chengdu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Bank of Chengdu
The main advantage of trading using opposite Shandong Ruifeng and Bank of Chengdu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Bank of Chengdu 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 Bank of Chengdu will offset losses from the drop in Bank of Chengdu's 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 |
| Bank of Chengdu vs. Suzhou Mingzhi Technology | Bank of Chengdu vs. Jilin Jlu Communication | Bank of Chengdu vs. China Eastern Airlines | Bank of Chengdu vs. XiaMen HongXin Electron tech |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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