Correlation Between China Longyuan and Yantai North
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By analyzing existing cross correlation between China Longyuan Power and Yantai North Andre, you can compare the effects of market volatilities on China Longyuan and Yantai North 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 Yantai North. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Yantai North.
Diversification Opportunities for China Longyuan and Yantai North
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Yantai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Yantai North Andre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai North Andre 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 Yantai North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai North Andre has no effect on the direction of China Longyuan i.e., China Longyuan and Yantai North go up and down completely randomly.
Pair Corralation between China Longyuan and Yantai North
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the Yantai North. But the stock apears to be less risky and, when comparing its historical volatility, China Longyuan Power is 1.64 times less risky than Yantai North. The stock trades about 0.0 of its potential returns per unit of risk. The Yantai North Andre is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,031 in Yantai North Andre on August 29, 2024 and sell it today you would earn a total of 738.00 from holding Yantai North Andre or generate 36.34% 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. Yantai North Andre
Performance |
| Timeline |
| China Longyuan Power |
| Yantai North Andre |
China Longyuan and Yantai North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Yantai North
The main advantage of trading using opposite China Longyuan and Yantai North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Yantai North 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 Yantai North will offset losses from the drop in Yantai North'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 |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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