Correlation Between Hoshine Silicon and Shandong Polymer
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By analyzing existing cross correlation between Hoshine Silicon Ind and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Hoshine Silicon and Shandong Polymer 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 Hoshine Silicon with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoshine Silicon and Shandong Polymer.
Diversification Opportunities for Hoshine Silicon and Shandong Polymer
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hoshine and Shandong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hoshine Silicon Ind and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Hoshine Silicon 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 Hoshine Silicon Ind are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Hoshine Silicon i.e., Hoshine Silicon and Shandong Polymer go up and down completely randomly.
Pair Corralation between Hoshine Silicon and Shandong Polymer
Assuming the 90 days trading horizon Hoshine Silicon Ind is expected to under-perform the Shandong Polymer. But the stock apears to be less risky and, when comparing its historical volatility, Hoshine Silicon Ind is 2.11 times less risky than Shandong Polymer. The stock trades about -0.19 of its potential returns per unit of risk. The Shandong Polymer Biochemicals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 438.00 in Shandong Polymer Biochemicals on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Shandong Polymer Biochemicals or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoshine Silicon Ind vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Hoshine Silicon Ind |
| Shandong Polymer Bio |
Hoshine Silicon and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoshine Silicon and Shandong Polymer
The main advantage of trading using opposite Hoshine Silicon and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoshine Silicon position performs unexpectedly, Shandong Polymer 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 Polymer will offset losses from the drop in Shandong Polymer's long position.| Hoshine Silicon vs. Air China Ltd | Hoshine Silicon vs. Bangyan Technology Co | Hoshine Silicon vs. Ningbo Fangzheng Automobile | Hoshine Silicon vs. Zhongshan Public Utilities |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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