Correlation Between China Longyuan and COL Digital
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By analyzing existing cross correlation between China Longyuan Power and COL Digital Publishing, you can compare the effects of market volatilities on China Longyuan and COL Digital 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 COL Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and COL Digital.
Diversification Opportunities for China Longyuan and COL Digital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and COL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and COL Digital Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Digital Publishing 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 COL Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Digital Publishing has no effect on the direction of China Longyuan i.e., China Longyuan and COL Digital go up and down completely randomly.
Pair Corralation between China Longyuan and COL Digital
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the COL Digital. But the stock apears to be less risky and, when comparing its historical volatility, China Longyuan Power is 2.3 times less risky than COL Digital. The stock trades about -0.1 of its potential returns per unit of risk. The COL Digital Publishing is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,771 in COL Digital Publishing on September 4, 2024 and sell it today you would earn a total of 302.00 from holding COL Digital Publishing or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. COL Digital Publishing
Performance |
| Timeline |
| China Longyuan Power |
| COL Digital Publishing |
China Longyuan and COL Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and COL Digital
The main advantage of trading using opposite China Longyuan and COL Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, COL Digital 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 COL Digital will offset losses from the drop in COL Digital's long position.| China Longyuan vs. Nanjing OLO Home | China Longyuan vs. Guangzhou Haige Communications | China Longyuan vs. Zhongtong Guomai Communication | China Longyuan vs. Shandong Homey Aquatic |
| COL Digital vs. Lutian Machinery Co | COL Digital vs. China Longyuan Power | COL Digital vs. PetroChina Co Ltd | COL Digital 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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