Correlation Between Shandong Huifa and China Petroleum
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By analyzing existing cross correlation between Shandong Huifa Foodstuff and China Petroleum Chemical, you can compare the effects of market volatilities on Shandong Huifa and China Petroleum 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 Shandong Huifa with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Huifa and China Petroleum.
Diversification Opportunities for Shandong Huifa and China Petroleum
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and China is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Huifa Foodstuff and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and Shandong Huifa 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 Shandong Huifa Foodstuff are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of Shandong Huifa i.e., Shandong Huifa and China Petroleum go up and down completely randomly.
Pair Corralation between Shandong Huifa and China Petroleum
Assuming the 90 days trading horizon Shandong Huifa Foodstuff is expected to generate 6.12 times more return on investment than China Petroleum. However, Shandong Huifa is 6.12 times more volatile than China Petroleum Chemical. It trades about 0.32 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.23 per unit of risk. If you would invest 1,050 in Shandong Huifa Foodstuff on September 13, 2024 and sell it today you would earn a total of 405.00 from holding Shandong Huifa Foodstuff or generate 38.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Huifa Foodstuff vs. China Petroleum Chemical
Performance |
| Timeline |
| Shandong Huifa Foodstuff |
| China Petroleum Chemical |
Shandong Huifa and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Huifa and China Petroleum
The main advantage of trading using opposite Shandong Huifa and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Huifa position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum's long position.| Shandong Huifa vs. Nanjing Putian Telecommunications | Shandong Huifa vs. Tianjin Realty Development | Shandong Huifa vs. Kangyue Technology Co | Shandong Huifa vs. Shenzhen Hifuture Electric |
| China Petroleum vs. Shanghai Metersbonwe FashionAccessories | China Petroleum vs. China Sports Industry | China Petroleum vs. Zhongshan Broad Ocean Motor | China Petroleum vs. Sichuan Fulin Transportation |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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