Correlation Between Hengli Petrochemical and RoadMain T
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By analyzing existing cross correlation between Hengli Petrochemical Co and RoadMain T Co, you can compare the effects of market volatilities on Hengli Petrochemical and RoadMain T 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 RoadMain T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and RoadMain T.
Diversification Opportunities for Hengli Petrochemical and RoadMain T
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hengli and RoadMain is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T 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 RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and RoadMain T go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and RoadMain T
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to under-perform the RoadMain T. But the stock apears to be less risky and, when comparing its historical volatility, Hengli Petrochemical Co is 2.05 times less risky than RoadMain T. The stock trades about -0.01 of its potential returns per unit of risk. The RoadMain T Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,488 in RoadMain T Co on October 15, 2024 and sell it today you would earn a total of 200.00 from holding RoadMain T Co or generate 8.04% 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. RoadMain T Co
Performance |
| Timeline |
| Hengli Petrochemical |
| RoadMain T |
Hengli Petrochemical and RoadMain T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and RoadMain T
The main advantage of trading using opposite Hengli Petrochemical and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T'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 |
| RoadMain T vs. JiShi Media Co | RoadMain T vs. Nantong Haixing Electronics | RoadMain T vs. Peoples Insurance of | RoadMain T vs. Huayi Brothers Media |
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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