Correlation Between Fujian Longzhou and Guizhou Chanhen
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Fujian Longzhou and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Guizhou Chanhen.
Diversification Opportunities for Fujian Longzhou and Guizhou Chanhen
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fujian and Guizhou is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Guizhou Chanhen
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Guizhou Chanhen. In addition to that, Fujian Longzhou is 1.56 times more volatile than Guizhou Chanhen Chemical. It trades about -0.38 of its total potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.08 per unit of volatility. If you would invest 2,230 in Guizhou Chanhen Chemical on October 11, 2024 and sell it today you would lose (100.00) from holding Guizhou Chanhen Chemical or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Guizhou Chanhen Chemical |
Fujian Longzhou and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Guizhou Chanhen
The main advantage of trading using opposite Fujian Longzhou and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Fujian Longzhou vs. AVCON Information Tech | Fujian Longzhou vs. CITIC Guoan Information | Fujian Longzhou vs. Sublime China Information | Fujian Longzhou vs. Digital China Information |
| Guizhou Chanhen vs. Fibocom Wireless | Guizhou Chanhen vs. Haima Automobile Group | Guizhou Chanhen vs. Huaxia Fund Management | Guizhou Chanhen vs. Allwin Telecommunication Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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