Correlation Between Fujian Longzhou and Holitech Technology
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Holitech Technology Co, you can compare the effects of market volatilities on Fujian Longzhou and Holitech Technology 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 Holitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Holitech Technology.
Diversification Opportunities for Fujian Longzhou and Holitech Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Holitech is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology 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 Holitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holitech Technology has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Holitech Technology go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Holitech Technology
Assuming the 90 days trading horizon Fujian Longzhou is expected to generate 3.9 times less return on investment than Holitech Technology. But when comparing it to its historical volatility, Fujian Longzhou Transportation is 1.02 times less risky than Holitech Technology. It trades about 0.14 of its potential returns per unit of risk. Holitech Technology Co is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 158.00 in Holitech Technology Co on August 29, 2024 and sell it today you would earn a total of 86.00 from holding Holitech Technology Co or generate 54.43% 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. Holitech Technology Co
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Holitech Technology |
Fujian Longzhou and Holitech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Holitech Technology
The main advantage of trading using opposite Fujian Longzhou and Holitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Holitech Technology 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 Holitech Technology will offset losses from the drop in Holitech Technology'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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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