Correlation Between China Securities and Hengli Petrochemical
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By analyzing existing cross correlation between China Securities 800 and Hengli Petrochemical Co, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Hengli Petrochemical.
Diversification Opportunities for China Securities and Hengli Petrochemical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Hengli is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and China Securities 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 China Securities 800 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 China Securities i.e., China Securities and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between China Securities and Hengli Petrochemical
Assuming the 90 days trading horizon China Securities is expected to generate 1.24 times less return on investment than Hengli Petrochemical. But when comparing it to its historical volatility, China Securities 800 is 1.47 times less risky than Hengli Petrochemical. It trades about 0.01 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,553 in Hengli Petrochemical Co on September 20, 2024 and sell it today you would lose (19.00) from holding Hengli Petrochemical Co or give up 1.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Securities 800 vs. Hengli Petrochemical Co
Performance |
Timeline |
China Securities and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
Hengli Petrochemical Co
Pair trading matchups for Hengli Petrochemical
Pair Trading with China Securities and Hengli Petrochemical
The main advantage of trading using opposite China Securities and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.China Securities vs. Unigroup Guoxin Microelectronics | China Securities vs. Northern United Publishing | China Securities vs. Shandong Publishing Media | China Securities vs. Dongguan Tarry Electronics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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