Correlation Between Fujian Longzhou and Xiangyang Automobile
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Fujian Longzhou and Xiangyang Automobile 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 Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Xiangyang Automobile.
Diversification Opportunities for Fujian Longzhou and Xiangyang Automobile
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Xiangyang is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile 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 Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Xiangyang Automobile
Assuming the 90 days trading horizon Fujian Longzhou is expected to generate 10.03 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, Fujian Longzhou Transportation is 1.26 times less risky than Xiangyang Automobile. It trades about 0.01 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Xiangyang Automobile Bearing on November 4, 2024 and sell it today you would earn a total of 232.00 from holding Xiangyang Automobile Bearing or generate 61.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Xiangyang Automobile |
Fujian Longzhou and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Xiangyang Automobile
The main advantage of trading using opposite Fujian Longzhou and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Fujian Longzhou vs. Beijing Baolande Software | Fujian Longzhou vs. Fiberhome Telecommunication Technologies | Fujian Longzhou vs. Jiangsu Hoperun Software | Fujian Longzhou vs. Zhangjiagang Elegant Home |
| Xiangyang Automobile vs. Chengtun Mining Group | Xiangyang Automobile vs. Zhengzhou Coal Mining | Xiangyang Automobile vs. Shaanxi Broadcast TV | Xiangyang Automobile vs. Zijin Mining Group |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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