Correlation Between Yingde Greatchem and Aba Chemicals
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Aba Chemicals Corp, you can compare the effects of market volatilities on Yingde Greatchem and Aba Chemicals 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 Yingde Greatchem with a short position of Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Aba Chemicals.
Diversification Opportunities for Yingde Greatchem and Aba Chemicals
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yingde and Aba is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Aba Chemicals go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Aba Chemicals
Assuming the 90 days trading horizon Yingde Greatchem Chemicals is expected to generate 0.97 times more return on investment than Aba Chemicals. However, Yingde Greatchem Chemicals is 1.04 times less risky than Aba Chemicals. It trades about -0.1 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.29 per unit of risk. If you would invest 2,545 in Yingde Greatchem Chemicals on October 30, 2024 and sell it today you would lose (220.00) from holding Yingde Greatchem Chemicals or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Aba Chemicals Corp
Performance |
| Timeline |
| Yingde Greatchem Che |
| Aba Chemicals Corp |
Yingde Greatchem and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Aba Chemicals
The main advantage of trading using opposite Yingde Greatchem and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Shandong Gold Mining |
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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