Correlation Between Liuzhou Chemical and Guizhou Chanhen
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Liuzhou Chemical and Guizhou Chanhen 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 Liuzhou Chemical with a short position of Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Guizhou Chanhen.
Diversification Opportunities for Liuzhou Chemical and Guizhou Chanhen
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liuzhou and Guizhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Guizhou Chanhen
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.09 times more return on investment than Guizhou Chanhen. However, Liuzhou Chemical is 1.09 times more volatile than Guizhou Chanhen Chemical. It trades about 0.12 of its potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about 0.0 per unit of risk. If you would invest 286.00 in Liuzhou Chemical Industry on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Liuzhou Chemical Industry or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Guizhou Chanhen Chemical |
Liuzhou Chemical and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Guizhou Chanhen
The main advantage of trading using opposite Liuzhou Chemical and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining |
| Guizhou Chanhen vs. Zijin Mining Group | Guizhou Chanhen vs. Wanhua Chemical Group | Guizhou Chanhen vs. Baoshan Iron Steel | Guizhou Chanhen vs. Shandong Gold Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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