Correlation Between Lier Chemical and China Railway
Specify exactly 2 symbols:
By analyzing existing cross correlation between Lier Chemical Co and China Railway Construction, you can compare the effects of market volatilities on Lier Chemical and China Railway 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 Lier Chemical with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and China Railway.
Diversification Opportunities for Lier Chemical and China Railway
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lier and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Lier 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 Lier Chemical Co are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Lier Chemical i.e., Lier Chemical and China Railway go up and down completely randomly.
Pair Corralation between Lier Chemical and China Railway
Assuming the 90 days trading horizon Lier Chemical Co is expected to generate 1.13 times more return on investment than China Railway. However, Lier Chemical is 1.13 times more volatile than China Railway Construction. It trades about 0.09 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.27 per unit of risk. If you would invest 827.00 in Lier Chemical Co on November 1, 2024 and sell it today you would earn a total of 20.00 from holding Lier Chemical Co or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. China Railway Construction
Performance |
| Timeline |
| Lier Chemical |
| China Railway Constr |
Lier Chemical and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and China Railway
The main advantage of trading using opposite Lier Chemical and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Lier Chemical vs. Zijin Mining Group | Lier Chemical vs. Wanhua Chemical Group | Lier Chemical vs. Baoshan Iron Steel | Lier Chemical vs. Shandong Gold Mining |
| China Railway vs. BTG Hotels Group | China Railway vs. Fujian Newland Computer | China Railway vs. Jiangxi Hengda Hi Tech | China Railway vs. Lier Chemical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |