Correlation Between Fujian Longzhou and Longxing Chemical
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Longxing Chemical Stock, you can compare the effects of market volatilities on Fujian Longzhou and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Longxing Chemical.
Diversification Opportunities for Fujian Longzhou and Longxing Chemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Longxing is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Longxing Chemical go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Longxing Chemical
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.49 times more return on investment than Longxing Chemical. However, Fujian Longzhou is 1.49 times more volatile than Longxing Chemical Stock. It trades about 0.01 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.01 per unit of risk. If you would invest 457.00 in Fujian Longzhou Transportation on October 16, 2024 and sell it today you would lose (60.00) from holding Fujian Longzhou Transportation or give up 13.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Longxing Chemical Stock
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Longxing Chemical Stock |
Fujian Longzhou and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Longxing Chemical
The main advantage of trading using opposite Fujian Longzhou and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Fujian Longzhou vs. Hygon Information Technology | Fujian Longzhou vs. Hangzhou Gisway Information | Fujian Longzhou vs. Emdoor Information Co | Fujian Longzhou vs. Sharetronic Data Technology |
| Longxing Chemical vs. Thinkon Semiconductor Jinzhou | Longxing Chemical vs. Union Semiconductor Co | Longxing Chemical vs. Dongguan Tarry Electronics | Longxing Chemical vs. Giantec Semiconductor Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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