Correlation Between Lianhe Chemical and Gan Yuan
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By analyzing existing cross correlation between Lianhe Chemical Technology and Gan Yuan Foods, you can compare the effects of market volatilities on Lianhe Chemical and Gan Yuan 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 Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Gan Yuan.
Diversification Opportunities for Lianhe Chemical and Gan Yuan
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lianhe and Gan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods 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 Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Gan Yuan go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Gan Yuan
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 1.18 times more return on investment than Gan Yuan. However, Lianhe Chemical is 1.18 times more volatile than Gan Yuan Foods. It trades about 0.11 of its potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.07 per unit of risk. If you would invest 563.00 in Lianhe Chemical Technology on August 25, 2024 and sell it today you would earn a total of 30.00 from holding Lianhe Chemical Technology or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Gan Yuan Foods
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Gan Yuan Foods |
Lianhe Chemical and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Gan Yuan
The main advantage of trading using opposite Lianhe Chemical and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan'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 |
| Gan Yuan vs. Lianhe Chemical Technology | Gan Yuan vs. JCHX Mining Management | Gan Yuan vs. Shanghai CEO Environmental | Gan Yuan vs. Hubei Dinglong Chemical |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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