Correlation Between Sichuan Fulin and Fuda Alloy
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Fuda Alloy Materials, you can compare the effects of market volatilities on Sichuan Fulin and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Fuda Alloy.
Diversification Opportunities for Sichuan Fulin and Fuda Alloy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sichuan and Fuda is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Fuda Alloy go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Fuda Alloy
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 4.32 times less return on investment than Fuda Alloy. But when comparing it to its historical volatility, Sichuan Fulin Transportation is 1.48 times less risky than Fuda Alloy. It trades about 0.09 of its potential returns per unit of risk. Fuda Alloy Materials is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,274 in Fuda Alloy Materials on November 1, 2024 and sell it today you would earn a total of 243.00 from holding Fuda Alloy Materials or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Fuda Alloy Materials
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Fuda Alloy Materials |
Sichuan Fulin and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Fuda Alloy
The main advantage of trading using opposite Sichuan Fulin and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Sichuan Fulin vs. Wuhan Yangtze Communication | Sichuan Fulin vs. Beijing Bewinner Communications | Sichuan Fulin vs. Jilin Jlu Communication | Sichuan Fulin vs. Bank of Communications |
| Fuda Alloy vs. China Mobile Limited | Fuda Alloy vs. Shanghai Jinfeng Wine | Fuda Alloy vs. Nanjing Putian Telecommunications | Fuda Alloy vs. Sichuan Fulin Transportation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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