Correlation Between Lianhe Chemical and Zhongshan Broad-Ocean
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By analyzing existing cross correlation between Lianhe Chemical Technology and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Lianhe Chemical and Zhongshan Broad-Ocean 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 Zhongshan Broad-Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Zhongshan Broad-Ocean.
Diversification Opportunities for Lianhe Chemical and Zhongshan Broad-Ocean
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lianhe and Zhongshan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad-Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Zhongshan Broad-Ocean go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Zhongshan Broad-Ocean
Assuming the 90 days trading horizon Lianhe Chemical is expected to generate 3.6 times less return on investment than Zhongshan Broad-Ocean. In addition to that, Lianhe Chemical is 1.22 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.02 of its total potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about 0.07 per unit of volatility. If you would invest 441.00 in Zhongshan Broad Ocean Motor on November 5, 2024 and sell it today you would earn a total of 133.00 from holding Zhongshan Broad Ocean Motor or generate 30.16% 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. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Zhongshan Broad Ocean |
Lianhe Chemical and Zhongshan Broad-Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Zhongshan Broad-Ocean
The main advantage of trading using opposite Lianhe Chemical and Zhongshan Broad-Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Zhongshan Broad-Ocean 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 Broad-Ocean will offset losses from the drop in Zhongshan Broad-Ocean's long position.| Lianhe Chemical vs. Zijin Mining Group | Lianhe Chemical vs. Wanhua Chemical Group | Lianhe Chemical vs. Baoshan Iron Steel | Lianhe Chemical vs. Shandong Gold Mining |
| Zhongshan Broad-Ocean vs. BeiGene | Zhongshan Broad-Ocean vs. Kweichow Moutai Co | Zhongshan Broad-Ocean vs. Beijing Roborock Technology | Zhongshan Broad-Ocean vs. G bits Network Technology |
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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