Correlation Between Liaoning Dingjide and Shanghai Rightongene
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Shanghai Rightongene Biotechnology, you can compare the effects of market volatilities on Liaoning Dingjide and Shanghai Rightongene 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 Shanghai Rightongene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Shanghai Rightongene.
Diversification Opportunities for Liaoning Dingjide and Shanghai Rightongene
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liaoning and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Shanghai Rightongene Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rightongene 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 Shanghai Rightongene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rightongene has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Shanghai Rightongene go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Shanghai Rightongene
Assuming the 90 days trading horizon Liaoning Dingjide is expected to generate 2.73 times less return on investment than Shanghai Rightongene. But when comparing it to its historical volatility, Liaoning Dingjide Petrochemical is 1.47 times less risky than Shanghai Rightongene. It trades about 0.08 of its potential returns per unit of risk. Shanghai Rightongene Biotechnology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,856 in Shanghai Rightongene Biotechnology on August 29, 2024 and sell it today you would earn a total of 251.00 from holding Shanghai Rightongene Biotechnology or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Shanghai Rightongene Biotechno
Performance |
| Timeline |
| Liaoning Dingjide |
| Shanghai Rightongene |
Liaoning Dingjide and Shanghai Rightongene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Shanghai Rightongene
The main advantage of trading using opposite Liaoning Dingjide and Shanghai Rightongene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Shanghai Rightongene 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 Shanghai Rightongene will offset losses from the drop in Shanghai Rightongene's long position.| Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Shandong Gold Mining | Liaoning Dingjide vs. Rongsheng Petrochemical Co |
| Shanghai Rightongene vs. Industrial and Commercial | Shanghai Rightongene vs. China Construction Bank | Shanghai Rightongene vs. Agricultural Bank of | Shanghai Rightongene vs. Bank of China |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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