Correlation Between HeBei Jinniu and Chongqing Sulian
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By analyzing existing cross correlation between HeBei Jinniu Chemical and Chongqing Sulian Plastic, you can compare the effects of market volatilities on HeBei Jinniu and Chongqing Sulian 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 HeBei Jinniu with a short position of Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and Chongqing Sulian.
Diversification Opportunities for HeBei Jinniu and Chongqing Sulian
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between HeBei and Chongqing is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic and HeBei Jinniu 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 HeBei Jinniu Chemical are associated (or correlated) with Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and Chongqing Sulian go up and down completely randomly.
Pair Corralation between HeBei Jinniu and Chongqing Sulian
Assuming the 90 days trading horizon HeBei Jinniu Chemical is expected to generate 0.61 times more return on investment than Chongqing Sulian. However, HeBei Jinniu Chemical is 1.64 times less risky than Chongqing Sulian. It trades about 0.29 of its potential returns per unit of risk. Chongqing Sulian Plastic is currently generating about 0.16 per unit of risk. If you would invest 464.00 in HeBei Jinniu Chemical on November 3, 2024 and sell it today you would earn a total of 98.00 from holding HeBei Jinniu Chemical or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeBei Jinniu Chemical vs. Chongqing Sulian Plastic
Performance |
| Timeline |
| HeBei Jinniu Chemical |
| Chongqing Sulian Plastic |
HeBei Jinniu and Chongqing Sulian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeBei Jinniu and Chongqing Sulian
The main advantage of trading using opposite HeBei Jinniu and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, Chongqing Sulian 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 Chongqing Sulian will offset losses from the drop in Chongqing Sulian's long position.| HeBei Jinniu vs. Olympic Circuit Technology | HeBei Jinniu vs. Linewell Software Co | HeBei Jinniu vs. Montage Technology Co | HeBei Jinniu vs. Tongyu Communication |
| Chongqing Sulian vs. Jiaozuo Wanfang Aluminum | Chongqing Sulian vs. Cansino Biologics | Chongqing Sulian vs. Zhejiang Yongjin Metal | Chongqing Sulian vs. Wonders Information |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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