Correlation Between Guangdong Shenglu and Lingyuan Iron
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Lingyuan Iron Steel, you can compare the effects of market volatilities on Guangdong Shenglu and Lingyuan Iron 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 Guangdong Shenglu with a short position of Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Lingyuan Iron.
Diversification Opportunities for Guangdong Shenglu and Lingyuan Iron
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Lingyuan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Lingyuan Iron
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 1.16 times less return on investment than Lingyuan Iron. But when comparing it to its historical volatility, Guangdong Shenglu Telecommunication is 1.08 times less risky than Lingyuan Iron. It trades about 0.18 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Lingyuan Iron Steel on September 12, 2024 and sell it today you would earn a total of 65.00 from holding Lingyuan Iron Steel or generate 45.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Guangdong Shenglu |
| Lingyuan Iron Steel |
Guangdong Shenglu and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Lingyuan Iron
The main advantage of trading using opposite Guangdong Shenglu and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Lingyuan Iron 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 Lingyuan Iron will offset losses from the drop in Lingyuan Iron's long position.| Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China | Guangdong Shenglu vs. Agricultural Bank of |
| Lingyuan Iron vs. Zijin Mining Group | Lingyuan Iron vs. Wanhua Chemical Group | Lingyuan Iron vs. Baoshan Iron Steel | Lingyuan Iron vs. Shandong Gold Mining |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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