Correlation Between Qingdao Foods and Changsha DIALINE
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By analyzing existing cross correlation between Qingdao Foods Co and Changsha DIALINE New, you can compare the effects of market volatilities on Qingdao Foods and Changsha DIALINE 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 Changsha DIALINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Changsha DIALINE.
Diversification Opportunities for Qingdao Foods and Changsha DIALINE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qingdao and Changsha is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Changsha DIALINE New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha DIALINE New 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 Changsha DIALINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha DIALINE New has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Changsha DIALINE go up and down completely randomly.
Pair Corralation between Qingdao Foods and Changsha DIALINE
Assuming the 90 days trading horizon Qingdao Foods is expected to generate 1.36 times less return on investment than Changsha DIALINE. But when comparing it to its historical volatility, Qingdao Foods Co is 1.65 times less risky than Changsha DIALINE. It trades about 0.21 of its potential returns per unit of risk. Changsha DIALINE New is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 578.00 in Changsha DIALINE New on September 12, 2024 and sell it today you would earn a total of 327.00 from holding Changsha DIALINE New or generate 56.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Changsha DIALINE New
Performance |
| Timeline |
| Qingdao Foods |
| Changsha DIALINE New |
Qingdao Foods and Changsha DIALINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Changsha DIALINE
The main advantage of trading using opposite Qingdao Foods and Changsha DIALINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Changsha DIALINE 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 Changsha DIALINE will offset losses from the drop in Changsha DIALINE's long position.| Qingdao Foods vs. Zhejiang Xiantong RubberPlastic | Qingdao Foods vs. King Strong New Material | Qingdao Foods vs. Cangzhou Mingzhu Plastic | Qingdao Foods vs. Tonghua Grape Wine |
| Changsha DIALINE vs. Liaoning Dingjide Petrochemical | Changsha DIALINE vs. Guangzhou Ruoyuchen Information | Changsha DIALINE vs. Daoming OpticsChemical Co | Changsha DIALINE vs. Westone Information Industry |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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