Correlation Between Fujian Newland and LianChuang Electronic
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By analyzing existing cross correlation between Fujian Newland Computer and LianChuang Electronic Technology, you can compare the effects of market volatilities on Fujian Newland 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 Fujian Newland with a short position of LianChuang Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and LianChuang Electronic.
Diversification Opportunities for Fujian Newland and LianChuang Electronic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and LianChuang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and LianChuang Electronic Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianChuang Electronic and Fujian Newland 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 Fujian Newland Computer 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 Fujian Newland i.e., Fujian Newland and LianChuang Electronic go up and down completely randomly.
Pair Corralation between Fujian Newland and LianChuang Electronic
Assuming the 90 days trading horizon Fujian Newland is expected to generate 2.14 times less return on investment than LianChuang Electronic. But when comparing it to its historical volatility, Fujian Newland Computer is 1.33 times less risky than LianChuang Electronic. It trades about 0.03 of its potential returns per unit of risk. LianChuang Electronic Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 746.00 in LianChuang Electronic Technology on October 22, 2024 and sell it today you would earn a total of 203.00 from holding LianChuang Electronic Technology or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. LianChuang Electronic Technolo
Performance |
| Timeline |
| Fujian Newland Computer |
| LianChuang Electronic |
Fujian Newland and LianChuang Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and LianChuang Electronic
The main advantage of trading using opposite Fujian Newland and LianChuang Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland 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.| Fujian Newland vs. Xilong Chemical Co | Fujian Newland vs. HeBei Jinniu Chemical | Fujian Newland vs. Liuzhou Chemical Industry | Fujian Newland vs. Qingdao Choho Industrial |
| LianChuang Electronic vs. Unisplendour Corp | LianChuang Electronic vs. Dongfeng Automobile Co | LianChuang Electronic vs. Sinomach Automobile Co | LianChuang Electronic vs. Air China Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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