Correlation Between Rongsheng Petrochemical and Yunnan Chuangxin
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Yunnan Chuangxin New, you can compare the effects of market volatilities on Rongsheng Petrochemical and Yunnan Chuangxin 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 Rongsheng Petrochemical with a short position of Yunnan Chuangxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Yunnan Chuangxin.
Diversification Opportunities for Rongsheng Petrochemical and Yunnan Chuangxin
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Yunnan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Yunnan Chuangxin New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Chuangxin New and Rongsheng Petrochemical 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 Rongsheng Petrochemical Co are associated (or correlated) with Yunnan Chuangxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Chuangxin New has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Yunnan Chuangxin go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Yunnan Chuangxin
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 4.39 times less return on investment than Yunnan Chuangxin. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.81 times less risky than Yunnan Chuangxin. It trades about 0.06 of its potential returns per unit of risk. Yunnan Chuangxin New is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,447 in Yunnan Chuangxin New on September 23, 2024 and sell it today you would earn a total of 930.00 from holding Yunnan Chuangxin New or generate 38.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Rongsheng Petrochemical Co vs. Yunnan Chuangxin New
Performance |
Timeline |
Rongsheng Petrochemical |
Yunnan Chuangxin New |
Rongsheng Petrochemical and Yunnan Chuangxin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rongsheng Petrochemical and Yunnan Chuangxin
The main advantage of trading using opposite Rongsheng Petrochemical and Yunnan Chuangxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Yunnan Chuangxin 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 Yunnan Chuangxin will offset losses from the drop in Yunnan Chuangxin's long position.Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical vs. Shandong Gold Mining |
Yunnan Chuangxin vs. Zijin Mining Group | Yunnan Chuangxin vs. Wanhua Chemical Group | Yunnan Chuangxin vs. Baoshan Iron Steel | Yunnan Chuangxin 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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