Correlation Between Shandong Homey and Xinxiang Chemical
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By analyzing existing cross correlation between Shandong Homey Aquatic and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Shandong Homey and Xinxiang Chemical 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 Shandong Homey with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Homey and Xinxiang Chemical.
Diversification Opportunities for Shandong Homey and Xinxiang Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Xinxiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Homey Aquatic and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and Shandong Homey 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 Shandong Homey Aquatic are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Shandong Homey i.e., Shandong Homey and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Shandong Homey and Xinxiang Chemical
Assuming the 90 days trading horizon Shandong Homey Aquatic is expected to generate 0.71 times more return on investment than Xinxiang Chemical. However, Shandong Homey Aquatic is 1.41 times less risky than Xinxiang Chemical. It trades about 0.31 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.2 per unit of risk. If you would invest 227.00 in Shandong Homey Aquatic on September 16, 2024 and sell it today you would earn a total of 59.00 from holding Shandong Homey Aquatic or generate 25.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Homey Aquatic vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Shandong Homey Aquatic |
| Xinxiang Chemical Fiber |
Shandong Homey and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Homey and Xinxiang Chemical
The main advantage of trading using opposite Shandong Homey and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Homey position performs unexpectedly, Xinxiang Chemical 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| Shandong Homey vs. Nanjing Putian Telecommunications | Shandong Homey vs. Tianjin Realty Development | Shandong Homey vs. Kangyue Technology Co | Shandong Homey vs. Shenzhen Hifuture Electric |
| Xinxiang Chemical vs. Shandong Homey Aquatic | Xinxiang Chemical vs. Great Sun Foods Co | Xinxiang Chemical vs. Nanjing OLO Home | Xinxiang Chemical vs. Zoy Home Furnishing |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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