Correlation Between Shandong Longquan and Inner Mongolia
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Inner Mongolia BaoTou, you can compare the effects of market volatilities on Shandong Longquan and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Inner Mongolia.
Diversification Opportunities for Shandong Longquan and Inner Mongolia
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Inner is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Inner Mongolia BaoTou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia BaoTou 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia BaoTou has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Inner Mongolia go up and down completely randomly.
Pair Corralation between Shandong Longquan and Inner Mongolia
Assuming the 90 days trading horizon Shandong Longquan is expected to generate 1.22 times less return on investment than Inner Mongolia. In addition to that, Shandong Longquan is 1.2 times more volatile than Inner Mongolia BaoTou. It trades about 0.05 of its total potential returns per unit of risk. Inner Mongolia BaoTou is currently generating about 0.07 per unit of volatility. If you would invest 152.00 in Inner Mongolia BaoTou on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Inner Mongolia BaoTou or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Inner Mongolia BaoTou
Performance |
| Timeline |
| Shandong Longquan |
| Inner Mongolia BaoTou |
Shandong Longquan and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Inner Mongolia
The main advantage of trading using opposite Shandong Longquan and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| Shandong Longquan vs. Zhongrun Resources Investment | Shandong Longquan vs. Anji Foodstuff Co | Shandong Longquan vs. Henan Shuanghui Investment | Shandong Longquan vs. Fujian Anjoy Foods |
| Inner Mongolia vs. Beijing Jiaman Dress | Inner Mongolia vs. Puyang Huicheng Electronic | Inner Mongolia vs. TongFu Microelectronics Co | Inner Mongolia vs. Ningbo Kangqiang Electronics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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