Correlation Between Qingdao Foods and China Longyuan
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By analyzing existing cross correlation between Qingdao Foods Co and China Longyuan Power, you can compare the effects of market volatilities on Qingdao Foods and China Longyuan 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 Qingdao Foods with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and China Longyuan.
Diversification Opportunities for Qingdao Foods and China Longyuan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Qingdao and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and China Longyuan go up and down completely randomly.
Pair Corralation between Qingdao Foods and China Longyuan
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 1.2 times more return on investment than China Longyuan. However, Qingdao Foods is 1.2 times more volatile than China Longyuan Power. It trades about -0.14 of its potential returns per unit of risk. China Longyuan Power is currently generating about -0.21 per unit of risk. If you would invest 1,396 in Qingdao Foods Co on October 30, 2024 and sell it today you would lose (71.00) from holding Qingdao Foods Co or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. China Longyuan Power
Performance |
| Timeline |
| Qingdao Foods |
| China Longyuan Power |
Qingdao Foods and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and China Longyuan
The main advantage of trading using opposite Qingdao Foods and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Qingdao Foods vs. Youyou Foods Co | Qingdao Foods vs. Dongnan Electronics Co | Qingdao Foods vs. Techshine Electronics Co | Qingdao Foods vs. Guilin Seamild Foods |
| China Longyuan vs. Beijing Kingsoft Office | China Longyuan vs. Vontron Technology Co | China Longyuan vs. Oppein Home Group | China Longyuan vs. Uxi Unicomp Technology |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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