Correlation Between China Longyuan and East Money
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By analyzing existing cross correlation between China Longyuan Power and East Money Information, you can compare the effects of market volatilities on China Longyuan and East Money 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 East Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and East Money.
Diversification Opportunities for China Longyuan and East Money
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and East is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and East Money Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Money Information 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 East Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Money Information has no effect on the direction of China Longyuan i.e., China Longyuan and East Money go up and down completely randomly.
Pair Corralation between China Longyuan and East Money
Assuming the 90 days trading horizon China Longyuan is expected to generate 8.84 times less return on investment than East Money. But when comparing it to its historical volatility, China Longyuan Power is 1.91 times less risky than East Money. It trades about 0.03 of its potential returns per unit of risk. East Money Information is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,030 in East Money Information on August 29, 2024 and sell it today you would earn a total of 484.00 from holding East Money Information or generate 23.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. East Money Information
Performance |
| Timeline |
| China Longyuan Power |
| East Money Information |
China Longyuan and East Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and East Money
The main advantage of trading using opposite China Longyuan and East Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, East Money 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 East Money will offset losses from the drop in East Money's long position.| China Longyuan vs. Industrial and Commercial | China Longyuan vs. Agricultural Bank of | China Longyuan vs. China Construction Bank | China Longyuan vs. Bank of China |
| East Money vs. Kweichow Moutai Co | East Money vs. Contemporary Amperex Technology | East Money vs. G bits Network Technology | East Money vs. BYD Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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