Correlation Between Hengli Petrochemical and Contemporary Amperex
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By analyzing existing cross correlation between Hengli Petrochemical Co and Contemporary Amperex Technology, you can compare the effects of market volatilities on Hengli Petrochemical and Contemporary Amperex 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 Contemporary Amperex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Contemporary Amperex.
Diversification Opportunities for Hengli Petrochemical and Contemporary Amperex
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengli and Contemporary is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Contemporary Amperex Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contemporary Amperex 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 Contemporary Amperex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contemporary Amperex has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Contemporary Amperex go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Contemporary Amperex
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.67 times more return on investment than Contemporary Amperex. However, Hengli Petrochemical Co is 1.49 times less risky than Contemporary Amperex. It trades about 0.27 of its potential returns per unit of risk. Contemporary Amperex Technology is currently generating about 0.03 per unit of risk. If you would invest 1,423 in Hengli Petrochemical Co on September 28, 2024 and sell it today you would earn a total of 105.00 from holding Hengli Petrochemical Co or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. Contemporary Amperex Technolog
Performance |
| Timeline |
| Hengli Petrochemical |
| Contemporary Amperex |
Hengli Petrochemical and Contemporary Amperex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Contemporary Amperex
The main advantage of trading using opposite Hengli Petrochemical and Contemporary Amperex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Contemporary Amperex 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 Contemporary Amperex will offset losses from the drop in Contemporary Amperex'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 |
| Contemporary Amperex vs. Hengli Petrochemical Co | Contemporary Amperex vs. Dymatic Chemicals | Contemporary Amperex vs. Sinocat Environmental Technology | Contemporary Amperex vs. Ningbo Bohui Chemical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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