Correlation Between Linzhou Heavy and Chengdu Bright
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Chengdu Bright Eye, you can compare the effects of market volatilities on Linzhou Heavy and Chengdu Bright 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 Linzhou Heavy with a short position of Chengdu Bright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Chengdu Bright.
Diversification Opportunities for Linzhou Heavy and Chengdu Bright
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and Chengdu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and Chengdu Bright Eye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Bright Eye and Linzhou Heavy 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 Linzhou Heavy Machinery are associated (or correlated) with Chengdu Bright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Bright Eye has no effect on the direction of Linzhou Heavy i.e., Linzhou Heavy and Chengdu Bright go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Chengdu Bright
Assuming the 90 days trading horizon Linzhou Heavy Machinery is expected to generate 0.61 times more return on investment than Chengdu Bright. However, Linzhou Heavy Machinery is 1.64 times less risky than Chengdu Bright. It trades about 0.04 of its potential returns per unit of risk. Chengdu Bright Eye is currently generating about 0.02 per unit of risk. If you would invest 375.00 in Linzhou Heavy Machinery on October 24, 2024 and sell it today you would earn a total of 18.00 from holding Linzhou Heavy Machinery or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. Chengdu Bright Eye
Performance |
| Timeline |
| Linzhou Heavy Machinery |
| Chengdu Bright Eye |
Linzhou Heavy and Chengdu Bright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linzhou Heavy and Chengdu Bright
The main advantage of trading using opposite Linzhou Heavy and Chengdu Bright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy position performs unexpectedly, Chengdu Bright 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 Chengdu Bright will offset losses from the drop in Chengdu Bright's long position.| Linzhou Heavy vs. Xiamen Bank Co | Linzhou Heavy vs. Lecron Energy Saving | Linzhou Heavy vs. Nanxing Furniture Machinery | Linzhou Heavy vs. Qijing Machinery |
| Chengdu Bright vs. Anhui Tongguan Copper | Chengdu Bright vs. Linzhou Heavy Machinery | Chengdu Bright vs. Ye Chiu Metal | Chengdu Bright vs. Gifore Agricultural Machinery |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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