Correlation Between Changjiang Jinggong and Maoming Petro
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Changjiang Jinggong and Maoming Petro 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 Changjiang Jinggong with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Maoming Petro.
Diversification Opportunities for Changjiang Jinggong and Maoming Petro
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changjiang and Maoming is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Maoming Petro go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Maoming Petro
Assuming the 90 days trading horizon Changjiang Jinggong Steel is expected to generate 0.71 times more return on investment than Maoming Petro. However, Changjiang Jinggong Steel is 1.41 times less risky than Maoming Petro. It trades about -0.08 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.1 per unit of risk. If you would invest 311.00 in Changjiang Jinggong Steel on October 30, 2024 and sell it today you would lose (17.00) from holding Changjiang Jinggong Steel or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Jinggong Steel vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Changjiang Jinggong Steel |
| Maoming Petro Chemical |
Changjiang Jinggong and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Jinggong and Maoming Petro
The main advantage of trading using opposite Changjiang Jinggong and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Changjiang Jinggong vs. Anhui Transport Consulting | Changjiang Jinggong vs. Sichuan Fulin Transportation | Changjiang Jinggong vs. Shuhua Sports Co | Changjiang Jinggong vs. Southern PublishingMedia Co |
| Maoming Petro vs. Gem Year Industrial Co | Maoming Petro vs. Sichuan Yahua Industrial | Maoming Petro vs. Iat Automobile Technology | Maoming Petro vs. Qingdao Choho Industrial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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