Correlation Between LianChuang Electronic and Zhongshan Public
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By analyzing existing cross correlation between LianChuang Electronic Technology and Zhongshan Public Utilities, you can compare the effects of market volatilities on LianChuang Electronic and Zhongshan Public 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 LianChuang Electronic with a short position of Zhongshan Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianChuang Electronic and Zhongshan Public.
Diversification Opportunities for LianChuang Electronic and Zhongshan Public
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LianChuang and Zhongshan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding LianChuang Electronic Technolo and Zhongshan Public Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Public Uti and LianChuang Electronic 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 LianChuang Electronic Technology are associated (or correlated) with Zhongshan Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Public Uti has no effect on the direction of LianChuang Electronic i.e., LianChuang Electronic and Zhongshan Public go up and down completely randomly.
Pair Corralation between LianChuang Electronic and Zhongshan Public
Assuming the 90 days trading horizon LianChuang Electronic Technology is expected to generate 2.13 times more return on investment than Zhongshan Public. However, LianChuang Electronic is 2.13 times more volatile than Zhongshan Public Utilities. It trades about 0.08 of its potential returns per unit of risk. Zhongshan Public Utilities is currently generating about 0.14 per unit of risk. If you would invest 858.00 in LianChuang Electronic Technology on November 7, 2024 and sell it today you would earn a total of 26.00 from holding LianChuang Electronic Technology or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LianChuang Electronic Technolo vs. Zhongshan Public Utilities
Performance |
| Timeline |
| LianChuang Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zhongshan Public Uti |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LianChuang Electronic and Zhongshan Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianChuang Electronic and Zhongshan Public
The main advantage of trading using opposite LianChuang Electronic and Zhongshan Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianChuang Electronic position performs unexpectedly, Zhongshan Public 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 Zhongshan Public will offset losses from the drop in Zhongshan Public's long position.The idea behind LianChuang Electronic Technology and Zhongshan Public Utilities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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