Correlation Between Xiangyang Automobile and Shandong Longquan
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Xiangyang Automobile and Shandong Longquan 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 Xiangyang Automobile with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Shandong Longquan.
Diversification Opportunities for Xiangyang Automobile and Shandong Longquan
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Shandong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Shandong Longquan go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Shandong Longquan
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to under-perform the Shandong Longquan. In addition to that, Xiangyang Automobile is 2.61 times more volatile than Shandong Longquan Pipeline. It trades about -0.13 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.13 per unit of volatility. If you would invest 456.00 in Shandong Longquan Pipeline on October 30, 2024 and sell it today you would earn a total of 18.00 from holding Shandong Longquan Pipeline or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Xiangyang Automobile |
| Shandong Longquan |
Xiangyang Automobile and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Shandong Longquan
The main advantage of trading using opposite Xiangyang Automobile and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Shandong Longquan 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 Longquan will offset losses from the drop in Shandong Longquan's long position.| Xiangyang Automobile vs. Linewell Software Co | Xiangyang Automobile vs. Lootom Telcovideo Network | Xiangyang Automobile vs. China Eastern Airlines | Xiangyang Automobile vs. Shanghai Shuixing Home |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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