Correlation Between Eastroc Beverage and Hengli Petrochemical
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By analyzing existing cross correlation between Eastroc Beverage Group and Hengli Petrochemical Co, you can compare the effects of market volatilities on Eastroc Beverage 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 Eastroc Beverage with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastroc Beverage and Hengli Petrochemical.
Diversification Opportunities for Eastroc Beverage and Hengli Petrochemical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastroc and Hengli is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eastroc Beverage Group and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Eastroc Beverage 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 Eastroc Beverage Group 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 Eastroc Beverage i.e., Eastroc Beverage and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Eastroc Beverage and Hengli Petrochemical
Assuming the 90 days trading horizon Eastroc Beverage Group is expected to generate 1.63 times more return on investment than Hengli Petrochemical. However, Eastroc Beverage is 1.63 times more volatile than Hengli Petrochemical Co. It trades about 0.08 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.03 per unit of risk. If you would invest 22,048 in Eastroc Beverage Group on October 26, 2024 and sell it today you would earn a total of 2,231 from holding Eastroc Beverage Group or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastroc Beverage Group vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Eastroc Beverage |
| Hengli Petrochemical |
Eastroc Beverage and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastroc Beverage and Hengli Petrochemical
The main advantage of trading using opposite Eastroc Beverage and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastroc Beverage 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.| Eastroc Beverage vs. Agricultural Bank of | Eastroc Beverage vs. Industrial and Commercial | Eastroc Beverage vs. Bank of China | Eastroc Beverage vs. China Construction Bank |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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