Correlation Between Lianhe Chemical and Longxing Chemical
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By analyzing existing cross correlation between Lianhe Chemical Technology and Longxing Chemical Stock, you can compare the effects of market volatilities on Lianhe Chemical and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Longxing Chemical.
Diversification Opportunities for Lianhe Chemical and Longxing Chemical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lianhe and Longxing is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Longxing Chemical go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Longxing Chemical
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to under-perform the Longxing Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Lianhe Chemical Technology is 1.1 times less risky than Longxing Chemical. The stock trades about -0.08 of its potential returns per unit of risk. The Longxing Chemical Stock is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 554.00 in Longxing Chemical Stock on November 2, 2024 and sell it today you would earn a total of 2.00 from holding Longxing Chemical Stock or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Longxing Chemical Stock
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Longxing Chemical Stock |
Lianhe Chemical and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Longxing Chemical
The main advantage of trading using opposite Lianhe Chemical and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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