Correlation Between Shanghai Rongtai and Dymatic Chemicals
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By analyzing existing cross correlation between Shanghai Rongtai Health and Dymatic Chemicals, you can compare the effects of market volatilities on Shanghai Rongtai and Dymatic Chemicals 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 Shanghai Rongtai with a short position of Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Dymatic Chemicals.
Diversification Opportunities for Shanghai Rongtai and Dymatic Chemicals
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Dymatic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals and Shanghai Rongtai 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 Shanghai Rongtai Health are associated (or correlated) with Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Dymatic Chemicals
Assuming the 90 days trading horizon Shanghai Rongtai is expected to generate 4.3 times less return on investment than Dymatic Chemicals. But when comparing it to its historical volatility, Shanghai Rongtai Health is 2.71 times less risky than Dymatic Chemicals. It trades about 0.11 of its potential returns per unit of risk. Dymatic Chemicals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Dymatic Chemicals on September 12, 2024 and sell it today you would earn a total of 106.00 from holding Dymatic Chemicals or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Dymatic Chemicals
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Dymatic Chemicals |
Shanghai Rongtai and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Dymatic Chemicals
The main advantage of trading using opposite Shanghai Rongtai and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| Shanghai Rongtai vs. Lutian Machinery Co | Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. Bank of China | Shanghai Rongtai vs. Gansu Jiu Steel |
| Dymatic Chemicals vs. Zijin Mining Group | Dymatic Chemicals vs. Wanhua Chemical Group | Dymatic Chemicals vs. Baoshan Iron Steel | Dymatic Chemicals vs. Rongsheng Petrochemical Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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