Correlation Between Do Fluoride and Guangdong Liantai
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By analyzing existing cross correlation between Do Fluoride Chemicals Co and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Do Fluoride and Guangdong Liantai 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 Do Fluoride with a short position of Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Do Fluoride and Guangdong Liantai.
Diversification Opportunities for Do Fluoride and Guangdong Liantai
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 002407 and Guangdong is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Do Fluoride Chemicals Co and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai and Do Fluoride 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 Do Fluoride Chemicals Co are associated (or correlated) with Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Do Fluoride i.e., Do Fluoride and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Do Fluoride and Guangdong Liantai
Assuming the 90 days trading horizon Do Fluoride Chemicals Co is expected to generate 1.53 times more return on investment than Guangdong Liantai. However, Do Fluoride is 1.53 times more volatile than Guangdong Liantai Environmental. It trades about 0.1 of its potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about 0.13 per unit of risk. If you would invest 1,250 in Do Fluoride Chemicals Co on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Do Fluoride Chemicals Co or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Do Fluoride Chemicals Co vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Do Fluoride Chemicals |
| Guangdong Liantai |
Do Fluoride and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Do Fluoride and Guangdong Liantai
The main advantage of trading using opposite Do Fluoride and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Do Fluoride position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| Do Fluoride vs. Shanghai Broadband Technology | Do Fluoride vs. Heilongjiang Transport Development | Do Fluoride vs. Silkroad Visual Technology | Do Fluoride vs. Hangzhou Weiguang Electronic |
| Guangdong Liantai vs. Jiamei Food Packaging | Guangdong Liantai vs. Chahua Modern Housewares | Guangdong Liantai vs. Vanfund Urban Investment | Guangdong Liantai vs. Jahen Household Products |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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