Correlation Between Longxing Chemical and Shenzhen Centralcon
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By analyzing existing cross correlation between Longxing Chemical Stock and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Longxing Chemical and Shenzhen Centralcon 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 Longxing Chemical with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Shenzhen Centralcon.
Diversification Opportunities for Longxing Chemical and Shenzhen Centralcon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longxing and Shenzhen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Longxing 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 Longxing Chemical Stock are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Longxing Chemical and Shenzhen Centralcon
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 0.97 times more return on investment than Shenzhen Centralcon. However, Longxing Chemical Stock is 1.03 times less risky than Shenzhen Centralcon. It trades about 0.2 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.18 per unit of risk. If you would invest 510.00 in Longxing Chemical Stock on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Longxing Chemical Stock or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Longxing Chemical Stock |
| Shenzhen Centralcon |
Longxing Chemical and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Shenzhen Centralcon
The main advantage of trading using opposite Longxing Chemical and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.| Longxing Chemical vs. Zhejiang Yayi Metal | Longxing Chemical vs. Jiangsu Jinling Sports | Longxing Chemical vs. Uroica Mining Safety | Longxing Chemical vs. Shengda Mining Co |
| Shenzhen Centralcon vs. Industrial and Commercial | Shenzhen Centralcon vs. China Construction Bank | Shenzhen Centralcon vs. Bank of China | Shenzhen Centralcon vs. Agricultural Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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