Correlation Between Fujian Longzhou and Shenzhen Centralcon
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Fujian Longzhou and Shenzhen Centralcon 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 Fujian Longzhou with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shenzhen Centralcon.
Diversification Opportunities for Fujian Longzhou and Shenzhen Centralcon
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Shenzhen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Fujian Longzhou 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 Fujian Longzhou Transportation are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shenzhen Centralcon
Assuming the 90 days trading horizon Fujian Longzhou is expected to generate 3.89 times less return on investment than Shenzhen Centralcon. But when comparing it to its historical volatility, Fujian Longzhou Transportation is 1.11 times less risky than Shenzhen Centralcon. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Shenzhen Centralcon Investment on November 8, 2024 and sell it today you would earn a total of 72.00 from holding Shenzhen Centralcon Investment or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Fujian Longzhou Tran |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Centralcon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Longzhou and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shenzhen Centralcon
The main advantage of trading using opposite Fujian Longzhou and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.The idea behind Fujian Longzhou Transportation and Shenzhen Centralcon Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Managers module to screen money managers from public funds and ETFs managed around the world.
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