Correlation Between Shandong Longquan and Guangdong Shenglu
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Shandong Longquan and Guangdong Shenglu 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 Shandong Longquan with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Guangdong Shenglu.
Diversification Opportunities for Shandong Longquan and Guangdong Shenglu
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Guangdong is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Shandong Longquan 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 Shandong Longquan Pipeline are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Shandong Longquan and Guangdong Shenglu
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 0.41 times more return on investment than Guangdong Shenglu. However, Shandong Longquan Pipeline is 2.45 times less risky than Guangdong Shenglu. It trades about 0.44 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.1 per unit of risk. If you would invest 430.00 in Shandong Longquan Pipeline on November 7, 2024 and sell it today you would earn a total of 44.00 from holding Shandong Longquan Pipeline or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Shandong Longquan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Shenglu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shandong Longquan and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Guangdong Shenglu
The main advantage of trading using opposite Shandong Longquan and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.The idea behind Shandong Longquan Pipeline and Guangdong Shenglu Telecommunication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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