Correlation Between Fujian Longzhou and Chongqing Road
Specify exactly 2 symbols:
By analyzing existing cross correlation between Fujian Longzhou Transportation and Chongqing Road Bridge, you can compare the effects of market volatilities on Fujian Longzhou and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Chongqing Road.
Diversification Opportunities for Fujian Longzhou and Chongqing Road
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Chongqing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Chongqing Road go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Chongqing Road
Assuming the 90 days trading horizon Fujian Longzhou is expected to generate 1.03 times less return on investment than Chongqing Road. In addition to that, Fujian Longzhou is 1.02 times more volatile than Chongqing Road Bridge. It trades about 0.03 of its total potential returns per unit of risk. Chongqing Road Bridge is currently generating about 0.03 per unit of volatility. If you would invest 496.00 in Chongqing Road Bridge on November 8, 2024 and sell it today you would earn a total of 66.00 from holding Chongqing Road Bridge or generate 13.31% 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. Chongqing Road Bridge
Performance |
| Timeline |
| Fujian Longzhou Tran |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chongqing Road Bridge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Longzhou and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Chongqing Road
The main advantage of trading using opposite Fujian Longzhou and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.The idea behind Fujian Longzhou Transportation and Chongqing Road Bridge pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |