Correlation Between Long Yuan and Shandong Polymer
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By analyzing existing cross correlation between Long Yuan Construction and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Long Yuan and Shandong Polymer 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 Long Yuan with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Shandong Polymer.
Diversification Opportunities for Long Yuan and Shandong Polymer
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Long and Shandong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Long Yuan 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 Long Yuan Construction are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Long Yuan i.e., Long Yuan and Shandong Polymer go up and down completely randomly.
Pair Corralation between Long Yuan and Shandong Polymer
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 1.01 times more return on investment than Shandong Polymer. However, Long Yuan is 1.01 times more volatile than Shandong Polymer Biochemicals. It trades about -0.19 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.21 per unit of risk. If you would invest 436.00 in Long Yuan Construction on October 12, 2024 and sell it today you would lose (93.00) from holding Long Yuan Construction or give up 21.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Long Yuan Construction |
| Shandong Polymer Bio |
Long Yuan and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Shandong Polymer
The main advantage of trading using opposite Long Yuan and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Shandong Polymer 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 Polymer will offset losses from the drop in Shandong Polymer's long position.| Long Yuan vs. Agricultural Bank of | Long Yuan vs. Industrial and Commercial | Long Yuan vs. Bank of China | Long Yuan vs. PetroChina Co Ltd |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Rongsheng Petrochemical Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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