Correlation Between Ningbo Bohui and Shandong Polymer
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By analyzing existing cross correlation between Ningbo Bohui Chemical and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Ningbo Bohui 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 Ningbo Bohui with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Bohui and Shandong Polymer.
Diversification Opportunities for Ningbo Bohui and Shandong Polymer
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Shandong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Bohui Chemical 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 Ningbo Bohui 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 Ningbo Bohui Chemical 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 Ningbo Bohui i.e., Ningbo Bohui and Shandong Polymer go up and down completely randomly.
Pair Corralation between Ningbo Bohui and Shandong Polymer
Assuming the 90 days trading horizon Ningbo Bohui is expected to generate 3.43 times less return on investment than Shandong Polymer. But when comparing it to its historical volatility, Ningbo Bohui Chemical is 1.41 times less risky than Shandong Polymer. It trades about 0.03 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 440.00 in Shandong Polymer Biochemicals on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Shandong Polymer Biochemicals or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Bohui Chemical vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Ningbo Bohui Chemical |
| Shandong Polymer Bio |
Ningbo Bohui and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Bohui and Shandong Polymer
The main advantage of trading using opposite Ningbo Bohui and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Bohui 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.| Ningbo Bohui vs. Zhejiang Kingland Pipeline | Ningbo Bohui vs. ADAMA | Ningbo Bohui vs. Shanghai Lingyun Industries | Ningbo Bohui vs. Changchun Faway Automobile |
| Shandong Polymer vs. Everdisplay Optronics Shanghai | Shandong Polymer vs. Keeson Technology Corp | Shandong Polymer vs. Uxi Unicomp Technology | Shandong Polymer vs. Threes Company Media |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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