Correlation Between Fujian Longzhou and Tonghua Grape
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Tonghua Grape Wine, you can compare the effects of market volatilities on Fujian Longzhou and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Tonghua Grape.
Diversification Opportunities for Fujian Longzhou and Tonghua Grape
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Tonghua is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Tonghua Grape go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Tonghua Grape
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.56 times more return on investment than Tonghua Grape. However, Fujian Longzhou is 1.56 times more volatile than Tonghua Grape Wine. It trades about 0.01 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.03 per unit of risk. If you would invest 457.00 in Fujian Longzhou Transportation on October 14, 2024 and sell it today you would lose (61.00) from holding Fujian Longzhou Transportation or give up 13.35% 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. Tonghua Grape Wine
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Tonghua Grape Wine |
Fujian Longzhou and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Tonghua Grape
The main advantage of trading using opposite Fujian Longzhou and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Fujian Longzhou vs. Xiamen Goldenhome Co | Fujian Longzhou vs. Easyhome New Retail | Fujian Longzhou vs. Fiberhome Telecommunication Technologies | Fujian Longzhou vs. Jilin Jlu Communication |
| Tonghua Grape vs. Zhongshan Broad Ocean Motor | Tonghua Grape vs. Fujian Longzhou Transportation | Tonghua Grape vs. Shaanxi Broadcast TV | Tonghua Grape vs. Yindu Kitchen Equipment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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