Correlation Between ChengDu Hi and Shandong Polymer
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on ChengDu Hi and Shandong Polymer 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 ChengDu Hi with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Shandong Polymer.
Diversification Opportunities for ChengDu Hi and Shandong Polymer
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChengDu and Shandong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and ChengDu Hi 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 ChengDu Hi Tech Development are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Shandong Polymer go up and down completely randomly.
Pair Corralation between ChengDu Hi and Shandong Polymer
Assuming the 90 days trading horizon ChengDu Hi Tech Development is expected to generate 1.26 times more return on investment than Shandong Polymer. However, ChengDu Hi is 1.26 times more volatile than Shandong Polymer Biochemicals. It trades about 0.2 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.01 per unit of risk. If you would invest 5,771 in ChengDu Hi Tech Development on September 24, 2024 and sell it today you would earn a total of 550.00 from holding ChengDu Hi Tech Development or generate 9.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ChengDu Hi Tech Development vs. Shandong Polymer Biochemicals
Performance |
Timeline |
ChengDu Hi Tech |
Shandong Polymer Bio |
ChengDu Hi and Shandong Polymer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ChengDu Hi and Shandong Polymer
The main advantage of trading using opposite ChengDu Hi and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.ChengDu Hi vs. Glodon Software Co | ChengDu Hi vs. Kingclean Electric Co | ChengDu Hi vs. Dareway Software Co | ChengDu Hi vs. Chinese Universe Publishing |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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