Correlation Between Sichuan Fulin and Luzhou Lao
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Luzhou Lao Jiao, you can compare the effects of market volatilities on Sichuan Fulin and Luzhou Lao 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 Sichuan Fulin with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Luzhou Lao.
Diversification Opportunities for Sichuan Fulin and Luzhou Lao
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Luzhou is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Luzhou Lao go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Luzhou Lao
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 0.77 times more return on investment than Luzhou Lao. However, Sichuan Fulin Transportation is 1.3 times less risky than Luzhou Lao. It trades about 0.16 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about 0.02 per unit of risk. If you would invest 603.00 in Sichuan Fulin Transportation on August 25, 2024 and sell it today you would earn a total of 44.00 from holding Sichuan Fulin Transportation or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Luzhou Lao Jiao |
Sichuan Fulin and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Luzhou Lao
The main advantage of trading using opposite Sichuan Fulin and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Sichuan Fulin vs. Jonjee Hi tech Industrial | Sichuan Fulin vs. ChengDu Hi Tech Development | Sichuan Fulin vs. Iat Automobile Technology | Sichuan Fulin vs. Guangzhou Automobile Group |
| Luzhou Lao vs. Shenzhen Clou Electronics | Luzhou Lao vs. Sichuan Fulin Transportation | Luzhou Lao vs. China Sports Industry | Luzhou Lao vs. Leaguer Shenzhen MicroElectronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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