Correlation Between Yangmei Chemical and Chengdu Xingrong
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By analyzing existing cross correlation between Yangmei Chemical Co and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Yangmei Chemical and Chengdu Xingrong 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 Yangmei Chemical with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yangmei Chemical and Chengdu Xingrong.
Diversification Opportunities for Yangmei Chemical and Chengdu Xingrong
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yangmei and Chengdu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Yangmei Chemical Co and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Yangmei 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 Yangmei Chemical Co are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Yangmei Chemical i.e., Yangmei Chemical and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Yangmei Chemical and Chengdu Xingrong
Assuming the 90 days trading horizon Yangmei Chemical Co is expected to generate 1.51 times more return on investment than Chengdu Xingrong. However, Yangmei Chemical is 1.51 times more volatile than Chengdu Xingrong Investment. It trades about 0.12 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.04 per unit of risk. If you would invest 234.00 in Yangmei Chemical Co on September 5, 2024 and sell it today you would earn a total of 16.00 from holding Yangmei Chemical Co or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yangmei Chemical Co vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Yangmei Chemical |
| Chengdu Xingrong Inv |
Yangmei Chemical and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yangmei Chemical and Chengdu Xingrong
The main advantage of trading using opposite Yangmei Chemical and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yangmei Chemical position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Yangmei Chemical vs. Sichuan Jinshi Technology | Yangmei Chemical vs. FSPG Hi Tech Co | Yangmei Chemical vs. Wuhan Yangtze Communication | Yangmei Chemical vs. Fujian Newland Computer |
| Chengdu Xingrong vs. Focus Media Information | Chengdu Xingrong vs. Yangmei Chemical Co | Chengdu Xingrong vs. Thinkingdom Media Group | Chengdu Xingrong vs. Hengdian Entertainment 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 CEOs Directory module to screen CEOs from public companies around the world.
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