Correlation Between Sichuan Fulin and Fujian Longzhou
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Sichuan Fulin and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Fujian Longzhou.
Diversification Opportunities for Sichuan Fulin and Fujian Longzhou
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Fujian is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Fujian Longzhou
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 1.06 times less return on investment than Fujian Longzhou. But when comparing it to its historical volatility, Sichuan Fulin Transportation is 1.64 times less risky than Fujian Longzhou. It trades about 0.21 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Fujian Longzhou Transportation on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Fujian Longzhou Transportation or generate 10.61% 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. Fujian Longzhou Transportation
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Fujian Longzhou Tran |
Sichuan Fulin and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Fujian Longzhou
The main advantage of trading using opposite Sichuan Fulin and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Sichuan Fulin vs. Cambricon Technologies Corp | Sichuan Fulin vs. Loongson Technology Corp | Sichuan Fulin vs. Chongqing Road Bridge | Sichuan Fulin vs. Shenzhen Fortune Trend |
| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. China Construction Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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