Correlation Between Chengdu Xingrong and LianChuang Electronic
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By analyzing existing cross correlation between Chengdu Xingrong Investment and LianChuang Electronic Technology, you can compare the effects of market volatilities on Chengdu Xingrong and LianChuang Electronic 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 Chengdu Xingrong with a short position of LianChuang Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xingrong and LianChuang Electronic.
Diversification Opportunities for Chengdu Xingrong and LianChuang Electronic
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chengdu and LianChuang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xingrong Investment and LianChuang Electronic Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianChuang Electronic and Chengdu Xingrong 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 Chengdu Xingrong Investment are associated (or correlated) with LianChuang Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianChuang Electronic has no effect on the direction of Chengdu Xingrong i.e., Chengdu Xingrong and LianChuang Electronic go up and down completely randomly.
Pair Corralation between Chengdu Xingrong and LianChuang Electronic
Assuming the 90 days trading horizon Chengdu Xingrong Investment is expected to generate 0.5 times more return on investment than LianChuang Electronic. However, Chengdu Xingrong Investment is 2.0 times less risky than LianChuang Electronic. It trades about 0.05 of its potential returns per unit of risk. LianChuang Electronic Technology is currently generating about -0.01 per unit of risk. If you would invest 478.00 in Chengdu Xingrong Investment on October 16, 2024 and sell it today you would earn a total of 205.00 from holding Chengdu Xingrong Investment or generate 42.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xingrong Investment vs. LianChuang Electronic Technolo
Performance |
| Timeline |
| Chengdu Xingrong Inv |
| LianChuang Electronic |
Chengdu Xingrong and LianChuang Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xingrong and LianChuang Electronic
The main advantage of trading using opposite Chengdu Xingrong and LianChuang Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xingrong position performs unexpectedly, LianChuang Electronic 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 LianChuang Electronic will offset losses from the drop in LianChuang Electronic's long position.| Chengdu Xingrong vs. Shanghai Newtouch Software | Chengdu Xingrong vs. Thunder Software Technology | Chengdu Xingrong vs. Invengo Information Technology | Chengdu Xingrong vs. China National Software |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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