Correlation Between HeBei Jinniu and Liaoning Dingjide
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By analyzing existing cross correlation between HeBei Jinniu Chemical and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on HeBei Jinniu and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and Liaoning Dingjide.
Diversification Opportunities for HeBei Jinniu and Liaoning Dingjide
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HeBei and Liaoning is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between HeBei Jinniu and Liaoning Dingjide
Assuming the 90 days trading horizon HeBei Jinniu Chemical is expected to generate 0.9 times more return on investment than Liaoning Dingjide. However, HeBei Jinniu Chemical is 1.11 times less risky than Liaoning Dingjide. It trades about 0.02 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about -0.04 per unit of risk. If you would invest 514.00 in HeBei Jinniu Chemical on October 29, 2024 and sell it today you would earn a total of 25.00 from holding HeBei Jinniu Chemical or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeBei Jinniu Chemical vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| HeBei Jinniu Chemical |
| Liaoning Dingjide |
HeBei Jinniu and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeBei Jinniu and Liaoning Dingjide
The main advantage of trading using opposite HeBei Jinniu and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| HeBei Jinniu vs. HaiXin Foods Co | HeBei Jinniu vs. Gan Yuan Foods | HeBei Jinniu vs. Fujian Anjoy Foods | HeBei Jinniu vs. CICC Fund Management |
| Liaoning Dingjide vs. Guangdong Wens Foodstuff | Liaoning Dingjide vs. Xinjiang Tianrun Dairy | Liaoning Dingjide vs. Shanghai Ziyan Foods | Liaoning Dingjide vs. Namchow Food 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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