Correlation Between Fujian Longzhou and Anhui Jianghuai
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Fujian Longzhou and Anhui Jianghuai 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 Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Anhui Jianghuai.
Diversification Opportunities for Fujian Longzhou and Anhui Jianghuai
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fujian and Anhui is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto 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 Anhui Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Anhui Jianghuai
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 0.86 times more return on investment than Anhui Jianghuai. However, Fujian Longzhou Transportation is 1.17 times less risky than Anhui Jianghuai. It trades about 0.19 of its potential returns per unit of risk. Anhui Jianghuai Automobile is currently generating about -0.06 per unit of risk. If you would invest 446.00 in Fujian Longzhou Transportation on August 31, 2024 and sell it today you would earn a total of 78.00 from holding Fujian Longzhou Transportation or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Anhui Jianghuai Auto |
Fujian Longzhou and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Anhui Jianghuai
The main advantage of trading using opposite Fujian Longzhou and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Anhui Jianghuai 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 Anhui Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| Fujian Longzhou vs. Cultural Investment Holdings | Fujian Longzhou vs. Gome Telecom Equipment | Fujian Longzhou vs. Bus Online Co | Fujian Longzhou vs. Holitech Technology Co |
| Anhui Jianghuai vs. China State Construction | Anhui Jianghuai vs. China Merchants Shekou | Anhui Jianghuai vs. Huafa Industrial Co | Anhui Jianghuai vs. China International Capital |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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