Correlation Between Shandong Longquan and Zhangjiagang Freetrade
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Zhangjiagang Freetrade Science, you can compare the effects of market volatilities on Shandong Longquan and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Zhangjiagang Freetrade.
Diversification Opportunities for Shandong Longquan and Zhangjiagang Freetrade
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Zhangjiagang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Zhangjiagang Freetrade Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangjiagang Freetrade has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Zhangjiagang Freetrade go up and down completely randomly.
Pair Corralation between Shandong Longquan and Zhangjiagang Freetrade
Assuming the 90 days trading horizon Shandong Longquan is expected to generate 2.48 times less return on investment than Zhangjiagang Freetrade. But when comparing it to its historical volatility, Shandong Longquan Pipeline is 1.24 times less risky than Zhangjiagang Freetrade. It trades about 0.09 of its potential returns per unit of risk. Zhangjiagang Freetrade Science is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Zhangjiagang Freetrade Science on August 30, 2024 and sell it today you would earn a total of 43.00 from holding Zhangjiagang Freetrade Science or generate 12.8% 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. Zhangjiagang Freetrade Science
Performance |
| Timeline |
| Shandong Longquan |
| Zhangjiagang Freetrade |
Shandong Longquan and Zhangjiagang Freetrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Zhangjiagang Freetrade
The main advantage of trading using opposite Shandong Longquan and Zhangjiagang Freetrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Zhangjiagang Freetrade 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 Zhangjiagang Freetrade will offset losses from the drop in Zhangjiagang Freetrade'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 |
| Zhangjiagang Freetrade vs. BYD Co Ltd | Zhangjiagang Freetrade vs. China Mobile Limited | Zhangjiagang Freetrade vs. Agricultural Bank of | Zhangjiagang Freetrade vs. Industrial and Commercial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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