Correlation Between Bank of Chengdu and Shandong Ruifeng
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By analyzing existing cross correlation between Bank of Chengdu and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Bank of Chengdu and Shandong Ruifeng 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 Bank of Chengdu with a short position of Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Chengdu and Shandong Ruifeng.
Diversification Opportunities for Bank of Chengdu and Shandong Ruifeng
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Shandong is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Chengdu and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical and Bank of Chengdu 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 Bank of Chengdu are associated (or correlated) with Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Bank of Chengdu i.e., Bank of Chengdu and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Bank of Chengdu and Shandong Ruifeng
Assuming the 90 days trading horizon Bank of Chengdu is expected to generate 0.81 times more return on investment than Shandong Ruifeng. However, Bank of Chengdu is 1.24 times less risky than Shandong Ruifeng. It trades about 0.2 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about 0.1 per unit of risk. If you would invest 1,643 in Bank of Chengdu on November 4, 2024 and sell it today you would earn a total of 76.00 from holding Bank of Chengdu or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Chengdu vs. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Bank of Chengdu |
| Shandong Ruifeng Chemical |
Bank of Chengdu and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Chengdu and Shandong Ruifeng
The main advantage of trading using opposite Bank of Chengdu and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Chengdu position performs unexpectedly, Shandong Ruifeng 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 Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Bank of Chengdu vs. Zhejiang Huatong Meat | Bank of Chengdu vs. Shanghai Ziyan Foods | Bank of Chengdu vs. Xiangpiaopiao Food Co | Bank of Chengdu vs. JuneYao Dairy Co |
| Shandong Ruifeng vs. Zijin Mining Group | Shandong Ruifeng vs. Wanhua Chemical Group | Shandong Ruifeng vs. Baoshan Iron Steel | Shandong Ruifeng vs. Shandong Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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