Correlation Between Hengli Petrochemical and Jiangxi Naipu
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By analyzing existing cross correlation between Hengli Petrochemical Co and Jiangxi Naipu Mining, you can compare the effects of market volatilities on Hengli Petrochemical and Jiangxi Naipu 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 Jiangxi Naipu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Jiangxi Naipu.
Diversification Opportunities for Hengli Petrochemical and Jiangxi Naipu
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hengli and Jiangxi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Jiangxi Naipu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Naipu Mining 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 Jiangxi Naipu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Naipu Mining has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Jiangxi Naipu go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Jiangxi Naipu
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.54 times more return on investment than Jiangxi Naipu. However, Hengli Petrochemical Co is 1.86 times less risky than Jiangxi Naipu. It trades about -0.17 of its potential returns per unit of risk. Jiangxi Naipu Mining is currently generating about -0.16 per unit of risk. If you would invest 1,528 in Hengli Petrochemical Co on October 28, 2024 and sell it today you would lose (52.00) from holding Hengli Petrochemical Co or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. Jiangxi Naipu Mining
Performance |
| Timeline |
| Hengli Petrochemical |
| Jiangxi Naipu Mining |
Hengli Petrochemical and Jiangxi Naipu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Jiangxi Naipu
The main advantage of trading using opposite Hengli Petrochemical and Jiangxi Naipu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Jiangxi Naipu 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 Jiangxi Naipu will offset losses from the drop in Jiangxi Naipu'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 |
| Jiangxi Naipu vs. Sichuan Yahua Industrial | Jiangxi Naipu vs. Soochow Suzhou Industrial | Jiangxi Naipu vs. Shanghai Yanpu Metal | Jiangxi Naipu vs. Zhejiang Yongjin Metal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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