Correlation Between Longxing Chemical and Zhejiang Yayi
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By analyzing existing cross correlation between Longxing Chemical Stock and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Longxing Chemical and Zhejiang Yayi 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 Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Zhejiang Yayi.
Diversification Opportunities for Longxing Chemical and Zhejiang Yayi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longxing and Zhejiang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal 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 Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Longxing Chemical and Zhejiang Yayi
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 1.2 times more return on investment than Zhejiang Yayi. However, Longxing Chemical is 1.2 times more volatile than Zhejiang Yayi Metal. It trades about 0.22 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.07 per unit of risk. If you would invest 506.00 in Longxing Chemical Stock on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Longxing Chemical Stock or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Longxing Chemical Stock |
| Zhejiang Yayi Metal |
Longxing Chemical and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Zhejiang Yayi
The main advantage of trading using opposite Longxing Chemical and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Zhejiang Yayi 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 Zhejiang Yayi will offset losses from the drop in Zhejiang Yayi's long position.| Longxing Chemical vs. Zijin Mining Group | Longxing Chemical vs. Huaibei Mining Holdings | Longxing Chemical vs. Tibet Huayu Mining | Longxing Chemical vs. Shenzhen Silver Basis |
| Zhejiang Yayi vs. Lutian Machinery Co | Zhejiang Yayi vs. China Longyuan Power | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. Bank of China |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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