Correlation Between Rising Nonferrous and Lianhe Chemical
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By analyzing existing cross correlation between Rising Nonferrous Metals and Lianhe Chemical Technology, you can compare the effects of market volatilities on Rising Nonferrous and Lianhe Chemical 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 Rising Nonferrous with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Lianhe Chemical.
Diversification Opportunities for Rising Nonferrous and Lianhe Chemical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rising and Lianhe is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and Rising Nonferrous 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 Rising Nonferrous Metals are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Rising Nonferrous i.e., Rising Nonferrous and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Lianhe Chemical
Assuming the 90 days trading horizon Rising Nonferrous is expected to generate 1.87 times less return on investment than Lianhe Chemical. But when comparing it to its historical volatility, Rising Nonferrous Metals is 1.1 times less risky than Lianhe Chemical. It trades about 0.07 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 558.00 in Lianhe Chemical Technology on October 24, 2024 and sell it today you would earn a total of 39.00 from holding Lianhe Chemical Technology or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Rising Nonferrous Metals |
| Lianhe Chemical Tech |
Rising Nonferrous and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Lianhe Chemical
The main advantage of trading using opposite Rising Nonferrous and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Wanhua Chemical Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Shandong Gold Mining |
| Lianhe Chemical vs. Central Plains Environment | Lianhe Chemical vs. Thunder Software Technology | Lianhe Chemical vs. Shanghai Newtouch Software | Lianhe Chemical vs. Changjiang Jinggong Steel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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