Correlation Between Xilong Chemical and Shanghai Rongtai
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By analyzing existing cross correlation between Xilong Chemical Co and Shanghai Rongtai Health, you can compare the effects of market volatilities on Xilong Chemical and Shanghai Rongtai 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 Xilong Chemical with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Shanghai Rongtai.
Diversification Opportunities for Xilong Chemical and Shanghai Rongtai
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xilong and Shanghai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and Xilong Chemical 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 Xilong Chemical Co are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Xilong Chemical and Shanghai Rongtai
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.44 times more return on investment than Shanghai Rongtai. However, Xilong Chemical is 1.44 times more volatile than Shanghai Rongtai Health. It trades about 0.12 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about 0.14 per unit of risk. If you would invest 803.00 in Xilong Chemical Co on September 24, 2024 and sell it today you would earn a total of 62.00 from holding Xilong Chemical Co or generate 7.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xilong Chemical Co vs. Shanghai Rongtai Health
Performance |
Timeline |
Xilong Chemical |
Shanghai Rongtai Health |
Xilong Chemical and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xilong Chemical and Shanghai Rongtai
The main advantage of trading using opposite Xilong Chemical and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.Xilong Chemical vs. Zijin Mining Group | Xilong Chemical vs. Wanhua Chemical Group | Xilong Chemical vs. Baoshan Iron Steel | Xilong Chemical vs. Shandong Gold Mining |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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