Correlation Between Guangdong Liantai and Hengli Petrochemical
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By analyzing existing cross correlation between Guangdong Liantai Environmental and Hengli Petrochemical Co, you can compare the effects of market volatilities on Guangdong Liantai and Hengli Petrochemical 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 Guangdong Liantai with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Hengli Petrochemical.
Diversification Opportunities for Guangdong Liantai and Hengli Petrochemical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Hengli is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Guangdong Liantai 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 Guangdong Liantai Environmental are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Hengli Petrochemical
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the Hengli Petrochemical. In addition to that, Guangdong Liantai is 1.97 times more volatile than Hengli Petrochemical Co. It trades about -0.03 of its total potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.27 per unit of volatility. If you would invest 1,423 in Hengli Petrochemical Co on September 28, 2024 and sell it today you would earn a total of 103.00 from holding Hengli Petrochemical Co or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Guangdong Liantai |
| Hengli Petrochemical |
Guangdong Liantai and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and Hengli Petrochemical
The main advantage of trading using opposite Guangdong Liantai and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.| Guangdong Liantai vs. Ming Yang Smart | Guangdong Liantai vs. 159681 | Guangdong Liantai vs. 159005 | Guangdong Liantai vs. Loctek Ergonomic Technology |
| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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