Correlation Between Liaoning Dingjide and Huasi Agricultural
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Huasi Agricultural Development, you can compare the effects of market volatilities on Liaoning Dingjide and Huasi Agricultural 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 Liaoning Dingjide with a short position of Huasi Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Huasi Agricultural.
Diversification Opportunities for Liaoning Dingjide and Huasi Agricultural
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Huasi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Huasi Agricultural Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huasi Agricultural and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Huasi Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huasi Agricultural has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Huasi Agricultural go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Huasi Agricultural
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to generate 0.98 times more return on investment than Huasi Agricultural. However, Liaoning Dingjide Petrochemical is 1.02 times less risky than Huasi Agricultural. It trades about -0.11 of its potential returns per unit of risk. Huasi Agricultural Development is currently generating about -0.24 per unit of risk. If you would invest 3,391 in Liaoning Dingjide Petrochemical on October 17, 2024 and sell it today you would lose (362.00) from holding Liaoning Dingjide Petrochemical or give up 10.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Huasi Agricultural Development
Performance |
| Timeline |
| Liaoning Dingjide |
| Huasi Agricultural |
Liaoning Dingjide and Huasi Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Huasi Agricultural
The main advantage of trading using opposite Liaoning Dingjide and Huasi Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Huasi Agricultural 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 Huasi Agricultural will offset losses from the drop in Huasi Agricultural's long position.| Liaoning Dingjide vs. Beijing Yanjing Brewery | Liaoning Dingjide vs. Haima Automobile Group | Liaoning Dingjide vs. Suzhou Oriental Semiconductor | Liaoning Dingjide vs. Guangzhou Haige Communications |
| Huasi Agricultural vs. Jinhui Mining Co | Huasi Agricultural vs. China Aluminum International | Huasi Agricultural vs. Shenzhen Silver Basis | Huasi Agricultural vs. Shanghai Yanpu Metal |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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