Correlation Between Penyao Environmental and Shandong Polymer
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By analyzing existing cross correlation between Penyao Environmental Protection and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Penyao Environmental 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 Penyao Environmental with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penyao Environmental and Shandong Polymer.
Diversification Opportunities for Penyao Environmental and Shandong Polymer
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Penyao and Shandong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Penyao Environmental Protectio 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 Penyao 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 Penyao Environmental Protection 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 Penyao Environmental i.e., Penyao Environmental and Shandong Polymer go up and down completely randomly.
Pair Corralation between Penyao Environmental and Shandong Polymer
Assuming the 90 days trading horizon Penyao Environmental Protection is expected to generate 1.21 times more return on investment than Shandong Polymer. However, Penyao Environmental is 1.21 times more volatile than Shandong Polymer Biochemicals. It trades about 0.09 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.05 per unit of risk. If you would invest 495.00 in Penyao Environmental Protection on September 25, 2024 and sell it today you would earn a total of 62.00 from holding Penyao Environmental Protection or generate 12.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Penyao Environmental Protectio vs. Shandong Polymer Biochemicals
Performance |
Timeline |
Penyao Environmental |
Shandong Polymer Bio |
Penyao Environmental and Shandong Polymer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penyao Environmental and Shandong Polymer
The main advantage of trading using opposite Penyao Environmental and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penyao Environmental 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.Penyao Environmental vs. China Sports Industry | Penyao Environmental vs. Sportsoul Co Ltd | Penyao Environmental vs. Chinese Universe Publishing | Penyao Environmental vs. Xinhua Winshare Publishing |
Shandong Polymer vs. City Development Environment | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Eit Environmental Development | Shandong Polymer vs. Penyao Environmental Protection |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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