Correlation Between Fujian Longzhou and Shenzhen Clou
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Fujian Longzhou and Shenzhen Clou 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 Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shenzhen Clou.
Diversification Opportunities for Fujian Longzhou and Shenzhen Clou
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics 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 Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shenzhen Clou
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.55 times more return on investment than Shenzhen Clou. However, Fujian Longzhou is 1.55 times more volatile than Shenzhen Clou Electronics. It trades about -0.06 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about -0.2 per unit of risk. If you would invest 423.00 in Fujian Longzhou Transportation on November 1, 2024 and sell it today you would lose (18.00) from holding Fujian Longzhou Transportation or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shenzhen Clou Electronics
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shenzhen Clou Electronics |
Fujian Longzhou and Shenzhen Clou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shenzhen Clou
The main advantage of trading using opposite Fujian Longzhou and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shenzhen Clou 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 Clou will offset losses from the drop in Shenzhen Clou's long position.| Fujian Longzhou vs. Fujian Wanchen Biotechnology | Fujian Longzhou vs. Sichuan Hebang Biotechnology | Fujian Longzhou vs. Chengdu B ray Media | Fujian Longzhou vs. Guangdong Jinma Entertainment |
| Shenzhen Clou vs. Longjian Road Bridge | Shenzhen Clou vs. Fiberhome Telecommunication Technologies | Shenzhen Clou vs. Railway Signal Communication | Shenzhen Clou vs. Bank of Communications |
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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