Correlation Between Hubei Forbon and Shandong Polymer
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By analyzing existing cross correlation between Hubei Forbon Technology and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Hubei Forbon and Shandong Polymer 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 Hubei Forbon with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Shandong Polymer.
Diversification Opportunities for Hubei Forbon and Shandong Polymer
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Shandong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Shandong Polymer go up and down completely randomly.
Pair Corralation between Hubei Forbon and Shandong Polymer
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 0.99 times more return on investment than Shandong Polymer. However, Hubei Forbon Technology is 1.01 times less risky than Shandong Polymer. It trades about 0.23 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.11 per unit of risk. If you would invest 776.00 in Hubei Forbon Technology on September 4, 2024 and sell it today you would earn a total of 151.00 from holding Hubei Forbon Technology or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Hubei Forbon Technology |
| Shandong Polymer Bio |
Hubei Forbon and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Shandong Polymer
The main advantage of trading using opposite Hubei Forbon and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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