Correlation Between Fujian Longzhou and Zhejiang Yinlun
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Fujian Longzhou and Zhejiang Yinlun 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 Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Zhejiang Yinlun.
Diversification Opportunities for Fujian Longzhou and Zhejiang Yinlun
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Zhejiang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery 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 Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Zhejiang Yinlun
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.91 times more return on investment than Zhejiang Yinlun. However, Fujian Longzhou is 1.91 times more volatile than Zhejiang Yinlun Machinery. It trades about 0.14 of its potential returns per unit of risk. Zhejiang Yinlun Machinery is currently generating about -0.15 per unit of risk. If you would invest 443.00 in Fujian Longzhou Transportation on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Fujian Longzhou Transportation or generate 10.61% 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. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Zhejiang Yinlun Machinery |
Fujian Longzhou and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Zhejiang Yinlun
The main advantage of trading using opposite Fujian Longzhou and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Zhejiang Yinlun 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 Zhejiang Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. China Construction Bank |
| Zhejiang Yinlun vs. Loongson Technology Corp | Zhejiang Yinlun vs. Chongqing Road Bridge | Zhejiang Yinlun vs. Shenzhen Fortune Trend | Zhejiang Yinlun vs. Wuhan Xianglong Power |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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