Correlation Between Shandong Longquan and Dalian Thermal
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Dalian Thermal Power, you can compare the effects of market volatilities on Shandong Longquan and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Dalian Thermal.
Diversification Opportunities for Shandong Longquan and Dalian Thermal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Dalian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Dalian Thermal go up and down completely randomly.
Pair Corralation between Shandong Longquan and Dalian Thermal
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 0.56 times more return on investment than Dalian Thermal. However, Shandong Longquan Pipeline is 1.79 times less risky than Dalian Thermal. It trades about 0.15 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about 0.02 per unit of risk. If you would invest 486.00 in Shandong Longquan Pipeline on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Shandong Longquan Pipeline or generate 6.17% 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. Dalian Thermal Power
Performance |
| Timeline |
| Shandong Longquan |
| Dalian Thermal Power |
Shandong Longquan and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Dalian Thermal
The main advantage of trading using opposite Shandong Longquan and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Shandong Gold Mining |
| Dalian Thermal vs. Jinhe Biotechnology Co | Dalian Thermal vs. Jiujiang Shanshui Technology | Dalian Thermal vs. Northking Information Technology | Dalian Thermal vs. Jiangxi JDL Environmental |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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