Correlation Between Shandong Longquan and Suzhou Weizhixiang
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Shandong Longquan and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Suzhou Weizhixiang.
Diversification Opportunities for Shandong Longquan and Suzhou Weizhixiang
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Suzhou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Shandong Longquan and Suzhou Weizhixiang
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 1.07 times more return on investment than Suzhou Weizhixiang. However, Shandong Longquan is 1.07 times more volatile than Suzhou Weizhixiang Food. It trades about 0.01 of its potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about -0.06 per unit of risk. If you would invest 478.00 in Shandong Longquan Pipeline on October 16, 2024 and sell it today you would lose (19.00) from holding Shandong Longquan Pipeline or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Shandong Longquan |
| Suzhou Weizhixiang Food |
Shandong Longquan and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Suzhou Weizhixiang
The main advantage of trading using opposite Shandong Longquan and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang's long position.| Shandong Longquan vs. Everdisplay Optronics Shanghai | Shandong Longquan vs. Zhongyin Babi Food | Shandong Longquan vs. Malion New Materials | Shandong Longquan vs. Caihong Display Devices |
| Suzhou Weizhixiang vs. Jinhui Mining Co | Suzhou Weizhixiang vs. Pengxin International Mining | Suzhou Weizhixiang vs. Shandong Longquan Pipeline | Suzhou Weizhixiang vs. Vats Liquor Chain |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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