Correlation Between Shandong Zhongji and China Petroleum
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By analyzing existing cross correlation between Shandong Zhongji Electrical and China Petroleum Chemical, you can compare the effects of market volatilities on Shandong Zhongji and China Petroleum 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 Zhongji with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Zhongji and China Petroleum.
Diversification Opportunities for Shandong Zhongji and China Petroleum
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Zhongji Electrical and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and Shandong Zhongji 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 Zhongji Electrical are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of Shandong Zhongji i.e., Shandong Zhongji and China Petroleum go up and down completely randomly.
Pair Corralation between Shandong Zhongji and China Petroleum
Assuming the 90 days trading horizon Shandong Zhongji Electrical is expected to generate 8.16 times more return on investment than China Petroleum. However, Shandong Zhongji is 8.16 times more volatile than China Petroleum Chemical. It trades about -0.01 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.48 per unit of risk. If you would invest 11,482 in Shandong Zhongji Electrical on November 28, 2024 and sell it today you would lose (347.00) from holding Shandong Zhongji Electrical or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Zhongji Electrical vs. China Petroleum Chemical
Performance |
| Timeline |
| Shandong Zhongji Ele |
| China Petroleum Chemical |
Shandong Zhongji and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Zhongji and China Petroleum
The main advantage of trading using opposite Shandong Zhongji and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Zhongji position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum's long position.| Shandong Zhongji vs. Western Metal Materials | Shandong Zhongji vs. Hubei Xingfa Chemicals | Shandong Zhongji vs. Chongqing Shunbo Aluminum | Shandong Zhongji vs. Porton Fine Chemicals |
| China Petroleum vs. Guolin Environmental Tech | China Petroleum vs. Konfoong Materials International | China Petroleum vs. Advanced Technology Materials | China Petroleum vs. Suzhou Xingye Material |
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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