Correlation Between Hengli Petrochemical and NBTM New
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By analyzing existing cross correlation between Hengli Petrochemical Co and NBTM New Materials, you can compare the effects of market volatilities on Hengli Petrochemical and NBTM New 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 NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and NBTM New.
Diversification Opportunities for Hengli Petrochemical and NBTM New
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hengli and NBTM is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials 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 NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and NBTM New go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and NBTM New
Assuming the 90 days trading horizon Hengli Petrochemical is expected to generate 1.0 times less return on investment than NBTM New. But when comparing it to its historical volatility, Hengli Petrochemical Co is 2.26 times less risky than NBTM New. It trades about 0.06 of its potential returns per unit of risk. NBTM New Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,697 in NBTM New Materials on November 1, 2024 and sell it today you would earn a total of 24.00 from holding NBTM New Materials or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. NBTM New Materials
Performance |
| Timeline |
| Hengli Petrochemical |
| NBTM New Materials |
Hengli Petrochemical and NBTM New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and NBTM New
The main advantage of trading using opposite Hengli Petrochemical and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New'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 |
| NBTM New vs. Tianshan Aluminum Group | NBTM New vs. Jiangsu Jinling Sports | NBTM New vs. Aluminum Corp of | NBTM New vs. Shenzhen Urban Transport |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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