Correlation Between Zhejiang Yinlun and Fujian Longzhou
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Zhejiang Yinlun and Fujian Longzhou 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 Zhejiang Yinlun with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Fujian Longzhou.
Diversification Opportunities for Zhejiang Yinlun and Fujian Longzhou
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Fujian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Zhejiang Yinlun 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 Zhejiang Yinlun Machinery are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Zhejiang Yinlun i.e., Zhejiang Yinlun and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Fujian Longzhou
Assuming the 90 days trading horizon Zhejiang Yinlun Machinery is expected to under-perform the Fujian Longzhou. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Yinlun Machinery is 1.91 times less risky than Fujian Longzhou. The stock trades about -0.15 of its potential returns per unit of risk. The Fujian Longzhou Transportation is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Fujian Longzhou Transportation on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Fujian Longzhou Transportation or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
| Fujian Longzhou Tran |
Zhejiang Yinlun and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Fujian Longzhou
The main advantage of trading using opposite Zhejiang Yinlun and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Zhejiang Yinlun vs. Loongson Technology Corp | Zhejiang Yinlun vs. Chongqing Road Bridge | Zhejiang Yinlun vs. Shenzhen Fortune Trend | Zhejiang Yinlun vs. Wuhan Xianglong Power |
| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. China Construction Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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