Correlation Between Liuzhou Chemical and Shandong Gold
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Shandong Gold Mining, you can compare the effects of market volatilities on Liuzhou Chemical and Shandong Gold 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 Shandong Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Shandong Gold.
Diversification Opportunities for Liuzhou Chemical and Shandong Gold
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liuzhou and Shandong is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Shandong Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Gold Mining 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 Shandong Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Gold Mining has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Shandong Gold go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Shandong Gold
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 2.31 times more return on investment than Shandong Gold. However, Liuzhou Chemical is 2.31 times more volatile than Shandong Gold Mining. It trades about 0.09 of its potential returns per unit of risk. Shandong Gold Mining is currently generating about -0.36 per unit of risk. If you would invest 286.00 in Liuzhou Chemical Industry on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Liuzhou Chemical Industry or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Shandong Gold Mining
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Shandong Gold Mining |
Liuzhou Chemical and Shandong Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Shandong Gold
The main advantage of trading using opposite Liuzhou Chemical and Shandong Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Shandong Gold 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 Shandong Gold will offset losses from the drop in Shandong Gold's long position.| Liuzhou Chemical vs. Shandong Gold Mining | Liuzhou Chemical vs. Rongsheng Petrochemical Co | Liuzhou Chemical vs. Inner Mongolia BaoTou | Liuzhou Chemical vs. Jiangxi Ganfeng Lithium |
| Shandong Gold vs. Dongguan Aohai Technology | Shandong Gold vs. Jiujiang Shanshui Technology | Shandong Gold vs. Guangzhou KingTeller Technology | Shandong Gold vs. GigaDevice SemiconductorBeiji |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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