Correlation Between Dawning Information and Rongsheng Petrochemical
Specify exactly 2 symbols:
By analyzing existing cross correlation between Dawning Information Industry and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Dawning Information and Rongsheng Petrochemical 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 Dawning Information with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawning Information and Rongsheng Petrochemical.
Diversification Opportunities for Dawning Information and Rongsheng Petrochemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dawning and Rongsheng is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dawning Information Industry and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Dawning Information 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 Dawning Information Industry are associated (or correlated) with Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Dawning Information i.e., Dawning Information and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Dawning Information and Rongsheng Petrochemical
Assuming the 90 days trading horizon Dawning Information Industry is expected to under-perform the Rongsheng Petrochemical. In addition to that, Dawning Information is 2.65 times more volatile than Rongsheng Petrochemical Co. It trades about -0.11 of its total potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about -0.06 per unit of volatility. If you would invest 1,000.00 in Rongsheng Petrochemical Co on September 13, 2024 and sell it today you would lose (22.00) from holding Rongsheng Petrochemical Co or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dawning Information Industry vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Dawning Information |
| Rongsheng Petrochemical |
Dawning Information and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dawning Information and Rongsheng Petrochemical
The main advantage of trading using opposite Dawning Information and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawning Information position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.The idea behind Dawning Information Industry and Rongsheng Petrochemical Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |