Correlation Between Lianhe Chemical and XinJiang GuoTong
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By analyzing existing cross correlation between Lianhe Chemical Technology and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Lianhe Chemical and XinJiang GuoTong 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 Lianhe Chemical with a short position of XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and XinJiang GuoTong.
Diversification Opportunities for Lianhe Chemical and XinJiang GuoTong
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lianhe and XinJiang is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline and Lianhe Chemical 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 Lianhe Chemical Technology are associated (or correlated) with XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Lianhe Chemical and XinJiang GuoTong
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 1.27 times more return on investment than XinJiang GuoTong. However, Lianhe Chemical is 1.27 times more volatile than XinJiang GuoTong Pipeline. It trades about 0.25 of its potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about 0.14 per unit of risk. If you would invest 526.00 in Lianhe Chemical Technology on November 5, 2024 and sell it today you would earn a total of 69.00 from holding Lianhe Chemical Technology or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. XinJiang GuoTong Pipeline
Performance |
| Timeline |
| Lianhe Chemical Tech |
| XinJiang GuoTong Pipeline |
Lianhe Chemical and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and XinJiang GuoTong
The main advantage of trading using opposite Lianhe Chemical and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, XinJiang GuoTong 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 XinJiang GuoTong will offset losses from the drop in XinJiang GuoTong's long position.| Lianhe Chemical vs. Hua Xia Bank | Lianhe Chemical vs. Shanghai Ziyan Foods | Lianhe Chemical vs. Yankershop Food Co | Lianhe Chemical vs. Financial Street Holdings |
| XinJiang GuoTong vs. Easyhome New Retail | XinJiang GuoTong vs. TongFu Microelectronics Co | XinJiang GuoTong vs. Bosera CMSK Industrial | XinJiang GuoTong vs. Guangdong Jingyi Metal |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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