Correlation Between Hengli Petrochemical and XinJiang GuoTong
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By analyzing existing cross correlation between Hengli Petrochemical Co and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Hengli Petrochemical and XinJiang GuoTong 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 Hengli Petrochemical with a short position of XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and XinJiang GuoTong.
Diversification Opportunities for Hengli Petrochemical and XinJiang GuoTong
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hengli and XinJiang is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline and Hengli Petrochemical 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 Hengli Petrochemical Co are associated (or correlated) with XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and XinJiang GuoTong
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.37 times more return on investment than XinJiang GuoTong. However, Hengli Petrochemical Co is 2.68 times less risky than XinJiang GuoTong. It trades about 0.03 of its potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about -0.01 per unit of risk. If you would invest 1,430 in Hengli Petrochemical Co on October 26, 2024 and sell it today you would earn a total of 32.00 from holding Hengli Petrochemical Co or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. XinJiang GuoTong Pipeline
Performance |
| Timeline |
| Hengli Petrochemical |
| XinJiang GuoTong Pipeline |
Hengli Petrochemical and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and XinJiang GuoTong
The main advantage of trading using opposite Hengli Petrochemical and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, XinJiang GuoTong 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 XinJiang GuoTong will offset losses from the drop in XinJiang GuoTong's long position.| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
| XinJiang GuoTong vs. Ming Yang Smart | XinJiang GuoTong vs. 159681 | XinJiang GuoTong vs. 159005 | XinJiang GuoTong vs. Loctek Ergonomic Technology |
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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