Correlation Between China Longyuan and Sportsoul
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By analyzing existing cross correlation between China Longyuan Power and Sportsoul Co Ltd, you can compare the effects of market volatilities on China Longyuan and Sportsoul 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 Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Sportsoul.
Diversification Opportunities for China Longyuan and Sportsoul
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sportsoul is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul 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 Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of China Longyuan i.e., China Longyuan and Sportsoul go up and down completely randomly.
Pair Corralation between China Longyuan and Sportsoul
Assuming the 90 days trading horizon China Longyuan is expected to generate 2.94 times less return on investment than Sportsoul. But when comparing it to its historical volatility, China Longyuan Power is 1.85 times less risky than Sportsoul. It trades about 0.01 of its potential returns per unit of risk. Sportsoul Co Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,451 in Sportsoul Co Ltd on September 13, 2024 and sell it today you would lose (47.00) from holding Sportsoul Co Ltd or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Sportsoul Co Ltd
Performance |
| Timeline |
| China Longyuan Power |
| Sportsoul |
China Longyuan and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Sportsoul
The main advantage of trading using opposite China Longyuan and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| China Longyuan vs. Xinhua Winshare Publishing | China Longyuan vs. Will Semiconductor Co | China Longyuan vs. Jiangsu Phoenix Publishing | China Longyuan vs. Southchip Semiconductor Technology |
| Sportsoul vs. Lutian Machinery Co | Sportsoul vs. China Longyuan Power | Sportsoul vs. PetroChina Co Ltd | Sportsoul 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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