Correlation Between Inner Mongolia and Hengli Petrochemical
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Hengli Petrochemical Co, you can compare the effects of market volatilities on Inner Mongolia and Hengli Petrochemical 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 Inner Mongolia with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Hengli Petrochemical.
Diversification Opportunities for Inner Mongolia and Hengli Petrochemical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inner and Hengli is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Inner Mongolia and Hengli Petrochemical
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.01 times more return on investment than Hengli Petrochemical. However, Inner Mongolia is 1.01 times more volatile than Hengli Petrochemical Co. It trades about 0.01 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.0 per unit of risk. If you would invest 193.00 in Inner Mongolia BaoTou on September 24, 2024 and sell it today you would earn a total of 2.00 from holding Inner Mongolia BaoTou or generate 1.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Inner Mongolia BaoTou vs. Hengli Petrochemical Co
Performance |
Timeline |
Inner Mongolia BaoTou |
Hengli Petrochemical |
Inner Mongolia and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inner Mongolia and Hengli Petrochemical
The main advantage of trading using opposite Inner Mongolia and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.Inner Mongolia vs. Suzhou Xingye Material | Inner Mongolia vs. Gansu Huangtai Wine marketing | Inner Mongolia vs. Bank of Suzhou | Inner Mongolia vs. Peoples Insurance of |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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