Correlation Between Fujian Longzhou and Xinjiang Beixin
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Xinjiang Beixin RoadBridge, you can compare the effects of market volatilities on Fujian Longzhou and Xinjiang Beixin 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 Xinjiang Beixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Xinjiang Beixin.
Diversification Opportunities for Fujian Longzhou and Xinjiang Beixin
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Xinjiang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Xinjiang Beixin RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Beixin Road 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 Xinjiang Beixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Beixin Road has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Xinjiang Beixin go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Xinjiang Beixin
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.3 times more return on investment than Xinjiang Beixin. However, Fujian Longzhou is 1.3 times more volatile than Xinjiang Beixin RoadBridge. It trades about -0.07 of its potential returns per unit of risk. Xinjiang Beixin RoadBridge is currently generating about -0.11 per unit of risk. If you would invest 425.00 in Fujian Longzhou Transportation on November 3, 2024 and sell it today you would lose (20.00) from holding Fujian Longzhou Transportation or give up 4.71% 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. Xinjiang Beixin RoadBridge
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Xinjiang Beixin Road |
Fujian Longzhou and Xinjiang Beixin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Xinjiang Beixin
The main advantage of trading using opposite Fujian Longzhou and Xinjiang Beixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Xinjiang Beixin 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 Xinjiang Beixin will offset losses from the drop in Xinjiang Beixin'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 |
| Xinjiang Beixin vs. PetroChina Co Ltd | Xinjiang Beixin vs. China Mobile Limited | Xinjiang Beixin vs. CNOOC Limited | Xinjiang Beixin vs. Ping An Insurance |
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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