Correlation Between Sichuan Yahua and Shandong Polymer
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Sichuan Yahua 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 Sichuan Yahua with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Shandong Polymer.
Diversification Opportunities for Sichuan Yahua and Shandong Polymer
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Shandong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial 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 Sichuan Yahua 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 Sichuan Yahua Industrial 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 Sichuan Yahua i.e., Sichuan Yahua and Shandong Polymer go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Shandong Polymer
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 1.06 times more return on investment than Shandong Polymer. However, Sichuan Yahua is 1.06 times more volatile than Shandong Polymer Biochemicals. It trades about 0.15 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.09 per unit of risk. If you would invest 911.00 in Sichuan Yahua Industrial on September 26, 2024 and sell it today you would earn a total of 305.00 from holding Sichuan Yahua Industrial or generate 33.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Yahua Industrial vs. Shandong Polymer Biochemicals
Performance |
Timeline |
Sichuan Yahua Industrial |
Shandong Polymer Bio |
Sichuan Yahua and Shandong Polymer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Yahua and Shandong Polymer
The main advantage of trading using opposite Sichuan Yahua and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua 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.Sichuan Yahua vs. Eastern Communications Co | Sichuan Yahua vs. GigaDevice SemiconductorBeiji | Sichuan Yahua vs. Semiconductor Manufacturing Electronics | Sichuan Yahua vs. StarPower Semiconductor |
Shandong Polymer vs. Quectel Wireless Solutions | Shandong Polymer vs. Sichuan Yahua Industrial | Shandong Polymer vs. Sichuan Fulin Transportation | Shandong Polymer vs. Hunan TV Broadcast |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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