Correlation Between Shandong Longquan and Chahua Modern
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Chahua Modern Housewares, you can compare the effects of market volatilities on Shandong Longquan and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Chahua Modern.
Diversification Opportunities for Shandong Longquan and Chahua Modern
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Chahua is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Chahua Modern go up and down completely randomly.
Pair Corralation between Shandong Longquan and Chahua Modern
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 0.48 times more return on investment than Chahua Modern. However, Shandong Longquan Pipeline is 2.07 times less risky than Chahua Modern. It trades about 0.12 of its potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.04 per unit of risk. If you would invest 456.00 in Shandong Longquan Pipeline on October 31, 2024 and sell it today you would earn a total of 18.00 from holding Shandong Longquan Pipeline or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Chahua Modern Housewares
Performance |
| Timeline |
| Shandong Longquan |
| Chahua Modern Housewares |
Shandong Longquan and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Chahua Modern
The main advantage of trading using opposite Shandong Longquan and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Shandong Longquan vs. Sino Platinum Metals Co | Shandong Longquan vs. Pengxin International Mining | Shandong Longquan vs. North Copper Shanxi | Shandong Longquan vs. CICC Fund Management |
| Chahua Modern vs. Zhejiang Construction Investment | Chahua Modern vs. Juneyao Airlines | Chahua Modern vs. Hainan Airlines Co | Chahua Modern vs. Nuode Investment Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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