Correlation Between Lianhe Chemical and Elite Color
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By analyzing existing cross correlation between Lianhe Chemical Technology and Elite Color Environmental, you can compare the effects of market volatilities on Lianhe Chemical and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Elite Color.
Diversification Opportunities for Lianhe Chemical and Elite Color
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lianhe and Elite is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Elite Color go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Elite Color
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to under-perform the Elite Color. But the stock apears to be less risky and, when comparing its historical volatility, Lianhe Chemical Technology is 1.01 times less risky than Elite Color. The stock trades about -0.1 of its potential returns per unit of risk. The Elite Color Environmental is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 667.00 in Elite Color Environmental on October 15, 2024 and sell it today you would lose (89.00) from holding Elite Color Environmental or give up 13.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Elite Color Environmental
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Elite Color Environmental |
Lianhe Chemical and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Elite Color
The main advantage of trading using opposite Lianhe Chemical and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| Lianhe Chemical vs. Bosera CMSK Industrial | Lianhe Chemical vs. Hengli Industrial Development | Lianhe Chemical vs. Universal Scientific Industrial | Lianhe Chemical vs. Hengdian Entertainment Co |
| Elite Color vs. Guangdong Silvere Sci | Elite Color vs. Zijin Mining Group | Elite Color vs. Shenyang Blue Silver | Elite Color vs. Jinhui Mining Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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