Correlation Between Shandong Longquan and Poly Real
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Poly Real Estate, you can compare the effects of market volatilities on Shandong Longquan and Poly Real 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 Poly Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Poly Real.
Diversification Opportunities for Shandong Longquan and Poly Real
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Poly is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Poly Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poly Real Estate 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 Poly Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poly Real Estate has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Poly Real go up and down completely randomly.
Pair Corralation between Shandong Longquan and Poly Real
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 1.21 times more return on investment than Poly Real. However, Shandong Longquan is 1.21 times more volatile than Poly Real Estate. It trades about 0.02 of its potential returns per unit of risk. Poly Real Estate is currently generating about -0.03 per unit of risk. If you would invest 429.00 in Shandong Longquan Pipeline on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Shandong Longquan Pipeline or generate 9.32% 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. Poly Real Estate
Performance |
| Timeline |
| Shandong Longquan |
| Poly Real Estate |
Shandong Longquan and Poly Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Poly Real
The main advantage of trading using opposite Shandong Longquan and Poly Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Poly Real 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 Poly Real will offset losses from the drop in Poly Real's long position.| Shandong Longquan vs. Long Yuan Construction | Shandong Longquan vs. Allied Machinery Co | Shandong Longquan vs. Anhui Huilong Agricultural | Shandong Longquan vs. Metro Investment Development |
| Poly Real vs. Hangzhou Gaoxin Rubber | Poly Real vs. Humanwell Healthcare Group | Poly Real vs. Renxin New Material | Poly Real vs. Suzhou Xingye Material |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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