Correlation Between China Longyuan and Central Plains
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By analyzing existing cross correlation between China Longyuan Power and Central Plains Environment, you can compare the effects of market volatilities on China Longyuan and Central Plains 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 China Longyuan with a short position of Central Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Central Plains.
Diversification Opportunities for China Longyuan and Central Plains
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Central is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Central Plains Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plains Envir and China Longyuan 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 China Longyuan Power are associated (or correlated) with Central Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plains Envir has no effect on the direction of China Longyuan i.e., China Longyuan and Central Plains go up and down completely randomly.
Pair Corralation between China Longyuan and Central Plains
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the Central Plains. In addition to that, China Longyuan is 1.05 times more volatile than Central Plains Environment. It trades about -0.19 of its total potential returns per unit of risk. Central Plains Environment is currently generating about -0.11 per unit of volatility. If you would invest 935.00 in Central Plains Environment on September 14, 2024 and sell it today you would lose (30.00) from holding Central Plains Environment or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Central Plains Environment
Performance |
| Timeline |
| China Longyuan Power |
| Central Plains Envir |
China Longyuan and Central Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Central Plains
The main advantage of trading using opposite China Longyuan and Central Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Central Plains 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 Central Plains will offset losses from the drop in Central Plains' long position.| China Longyuan vs. Zhejiang Construction Investment | China Longyuan vs. Zhuhai Comleader Information | China Longyuan vs. Westone Information Industry | China Longyuan vs. Jiugui Liquor Co |
| Central Plains vs. Lutian Machinery Co | Central Plains vs. China Longyuan Power | Central Plains vs. PetroChina Co Ltd | Central Plains vs. Bank of China |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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