Correlation Between Maoming Petro and Xilong Chemical
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Xilong Chemical Co, you can compare the effects of market volatilities on Maoming Petro and Xilong 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 Maoming Petro with a short position of Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Xilong Chemical.
Diversification Opportunities for Maoming Petro and Xilong Chemical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Maoming and Xilong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Maoming Petro i.e., Maoming Petro and Xilong Chemical go up and down completely randomly.
Pair Corralation between Maoming Petro and Xilong Chemical
Assuming the 90 days trading horizon Maoming Petro is expected to generate 1.18 times less return on investment than Xilong Chemical. But when comparing it to its historical volatility, Maoming Petro Chemical Shihua is 1.38 times less risky than Xilong Chemical. It trades about 0.19 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 618.00 in Xilong Chemical Co on September 23, 2024 and sell it today you would earn a total of 247.00 from holding Xilong Chemical Co or generate 39.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Xilong Chemical Co
Performance |
Timeline |
Maoming Petro Chemical |
Xilong Chemical |
Maoming Petro and Xilong Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Maoming Petro and Xilong Chemical
The main advantage of trading using opposite Maoming Petro and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Xilong 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.Maoming Petro vs. Youyou Foods Co | Maoming Petro vs. Tieling Newcity Investment | Maoming Petro vs. Xiangpiaopiao Food Co | Maoming Petro vs. Metro Investment Development |
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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 Stocks Directory module to find actively traded stocks across global markets.
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