Correlation Between Shandong Ruifeng and Liaoning Dingjide
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Shandong Ruifeng and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Liaoning Dingjide.
Diversification Opportunities for Shandong Ruifeng and Liaoning Dingjide
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Liaoning is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Liaoning Dingjide
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.7 times more return on investment than Liaoning Dingjide. However, Shandong Ruifeng is 1.7 times more volatile than Liaoning Dingjide Petrochemical. It trades about 0.14 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about 0.08 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Liaoning Dingjide |
Shandong Ruifeng and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Liaoning Dingjide
The main advantage of trading using opposite Shandong Ruifeng and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide'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 |
| Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Shandong Gold Mining | Liaoning Dingjide 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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