Correlation Between Longxing Chemical and Shanghai Action
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By analyzing existing cross correlation between Longxing Chemical Stock and Shanghai Action Education, you can compare the effects of market volatilities on Longxing Chemical and Shanghai Action 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 Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Shanghai Action.
Diversification Opportunities for Longxing Chemical and Shanghai Action
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Longxing and Shanghai is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education 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 Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Shanghai Action go up and down completely randomly.
Pair Corralation between Longxing Chemical and Shanghai Action
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to under-perform the Shanghai Action. In addition to that, Longxing Chemical is 1.72 times more volatile than Shanghai Action Education. It trades about -0.03 of its total potential returns per unit of risk. Shanghai Action Education is currently generating about 0.06 per unit of volatility. If you would invest 3,653 in Shanghai Action Education on October 11, 2024 and sell it today you would earn a total of 90.00 from holding Shanghai Action Education or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Shanghai Action Education
Performance |
| Timeline |
| Longxing Chemical Stock |
| Shanghai Action Education |
Longxing Chemical and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Shanghai Action
The main advantage of trading using opposite Longxing Chemical and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| Longxing Chemical vs. Puya Semiconductor Shanghai | Longxing Chemical vs. Giantec Semiconductor Corp | Longxing Chemical vs. Allwin Telecommunication Co | Longxing Chemical vs. Nexchip Semiconductor Corp |
| Shanghai Action vs. Eit Environmental Development | Shanghai Action vs. Cangzhou Mingzhu Plastic | Shanghai Action vs. GreenTech Environmental Co | Shanghai Action vs. Hangzhou Gaoxin Rubber |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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