Correlation Between GreenTech Environmental and Shenyang Chemical
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By analyzing existing cross correlation between GreenTech Environmental Co and Shenyang Chemical Industry, you can compare the effects of market volatilities on GreenTech Environmental and Shenyang Chemical 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 GreenTech Environmental with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTech Environmental and Shenyang Chemical.
Diversification Opportunities for GreenTech Environmental and Shenyang Chemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GreenTech and Shenyang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GreenTech Environmental Co and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and GreenTech Environmental 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 GreenTech Environmental Co are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of GreenTech Environmental i.e., GreenTech Environmental and Shenyang Chemical go up and down completely randomly.
Pair Corralation between GreenTech Environmental and Shenyang Chemical
Assuming the 90 days trading horizon GreenTech Environmental Co is expected to generate 0.51 times more return on investment than Shenyang Chemical. However, GreenTech Environmental Co is 1.94 times less risky than Shenyang Chemical. It trades about -0.39 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.24 per unit of risk. If you would invest 1,536 in GreenTech Environmental Co on October 14, 2024 and sell it today you would lose (237.00) from holding GreenTech Environmental Co or give up 15.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTech Environmental Co vs. Shenyang Chemical Industry
Performance |
| Timeline |
| GreenTech Environmental |
| Shenyang Chemical |
GreenTech Environmental and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTech Environmental and Shenyang Chemical
The main advantage of trading using opposite GreenTech Environmental and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTech Environmental position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.The idea behind GreenTech Environmental Co and Shenyang Chemical Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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