Correlation Between Fujian Longzhou and Nuode Investment
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Nuode Investment Co, you can compare the effects of market volatilities on Fujian Longzhou and Nuode Investment 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 Nuode Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Nuode Investment.
Diversification Opportunities for Fujian Longzhou and Nuode Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Nuode is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Nuode Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuode Investment 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 Nuode Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuode Investment has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Nuode Investment go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Nuode Investment
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.44 times more return on investment than Nuode Investment. However, Fujian Longzhou is 1.44 times more volatile than Nuode Investment Co. It trades about 0.08 of its potential returns per unit of risk. Nuode Investment Co is currently generating about -0.04 per unit of risk. If you would invest 393.00 in Fujian Longzhou Transportation on November 7, 2024 and sell it today you would earn a total of 12.00 from holding Fujian Longzhou Transportation or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Nuode Investment Co
Performance |
| Timeline |
| Fujian Longzhou Tran |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuode Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Longzhou and Nuode Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Nuode Investment
The main advantage of trading using opposite Fujian Longzhou and Nuode Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Nuode Investment 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 Nuode Investment will offset losses from the drop in Nuode Investment's long position.The idea behind Fujian Longzhou Transportation and Nuode Investment Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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