Correlation Between Fujian Longzhou and China Railway
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By analyzing existing cross correlation between Fujian Longzhou Transportation and China Railway Group, you can compare the effects of market volatilities on Fujian Longzhou and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and China Railway.
Diversification Opportunities for Fujian Longzhou and China Railway
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and China Railway go up and down completely randomly.
Pair Corralation between Fujian Longzhou and China Railway
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 2.2 times more return on investment than China Railway. However, Fujian Longzhou is 2.2 times more volatile than China Railway Group. It trades about -0.06 of its potential returns per unit of risk. China Railway Group is currently generating about -0.28 per unit of risk. If you would invest 423.00 in Fujian Longzhou Transportation on November 1, 2024 and sell it today you would lose (18.00) from holding Fujian Longzhou Transportation or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. China Railway Group
Performance |
| Timeline |
| Fujian Longzhou Tran |
| China Railway Group |
Fujian Longzhou and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and China Railway
The main advantage of trading using opposite Fujian Longzhou and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Fujian Longzhou vs. Fujian Wanchen Biotechnology | Fujian Longzhou vs. Sichuan Hebang Biotechnology | Fujian Longzhou vs. Chengdu B ray Media | Fujian Longzhou vs. Guangdong Jinma Entertainment |
| China Railway vs. Shenzhen Urban Transport | China Railway vs. Heilongjiang Transport Development | China Railway vs. China Sports Industry | China Railway vs. Fujian Longzhou Transportation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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