Correlation Between Shanghai Phichem and Shandong Longquan
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By analyzing existing cross correlation between Shanghai Phichem Material and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Shanghai Phichem and Shandong Longquan 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 Shanghai Phichem with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Phichem and Shandong Longquan.
Diversification Opportunities for Shanghai Phichem and Shandong Longquan
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Shandong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Phichem Material and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Shanghai Phichem 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 Shanghai Phichem Material are associated (or correlated) with Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Shanghai Phichem i.e., Shanghai Phichem and Shandong Longquan go up and down completely randomly.
Pair Corralation between Shanghai Phichem and Shandong Longquan
Assuming the 90 days trading horizon Shanghai Phichem Material is expected to under-perform the Shandong Longquan. In addition to that, Shanghai Phichem is 1.22 times more volatile than Shandong Longquan Pipeline. It trades about -0.1 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.12 per unit of volatility. If you would invest 466.00 in Shandong Longquan Pipeline on October 25, 2024 and sell it today you would earn a total of 21.00 from holding Shandong Longquan Pipeline or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Phichem Material vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Shanghai Phichem Material |
| Shandong Longquan |
Shanghai Phichem and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Phichem and Shandong Longquan
The main advantage of trading using opposite Shanghai Phichem and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Phichem position performs unexpectedly, Shandong Longquan 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 Longquan will offset losses from the drop in Shandong Longquan's long position.| Shanghai Phichem vs. Lecron Energy Saving | Shanghai Phichem vs. HeNan Splendor Science | Shanghai Phichem vs. Industrial Bank Co | Shanghai Phichem vs. Guosheng Financial Holding |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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