Correlation Between Pengxin International and Longxing Chemical
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By analyzing existing cross correlation between Pengxin International Mining and Longxing Chemical Stock, you can compare the effects of market volatilities on Pengxin International and Longxing 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 Pengxin International with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Longxing Chemical.
Diversification Opportunities for Pengxin International and Longxing Chemical
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pengxin and Longxing is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Pengxin International i.e., Pengxin International and Longxing Chemical go up and down completely randomly.
Pair Corralation between Pengxin International and Longxing Chemical
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 0.87 times more return on investment than Longxing Chemical. However, Pengxin International Mining is 1.14 times less risky than Longxing Chemical. It trades about -0.06 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about -0.13 per unit of risk. If you would invest 329.00 in Pengxin International Mining on November 3, 2024 and sell it today you would lose (14.00) from holding Pengxin International Mining or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Longxing Chemical Stock
Performance |
| Timeline |
| Pengxin International |
| Longxing Chemical Stock |
Pengxin International and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Longxing Chemical
The main advantage of trading using opposite Pengxin International and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Longxing 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Pengxin International vs. Zijin Mining Group | Pengxin International vs. Wanhua Chemical Group | Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Shandong Gold Mining |
| Longxing Chemical vs. Hygon Information Technology | Longxing Chemical vs. YLZ Information Tech | Longxing Chemical vs. New Hope Dairy | Longxing Chemical vs. Eastroc Beverage Group |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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