Correlation Between Fujian Longzhou and Bomesc Offshore
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Bomesc Offshore Engineering, you can compare the effects of market volatilities on Fujian Longzhou and Bomesc Offshore 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 Bomesc Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Bomesc Offshore.
Diversification Opportunities for Fujian Longzhou and Bomesc Offshore
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Bomesc is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Bomesc Offshore Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomesc Offshore Engi 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 Bomesc Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomesc Offshore Engi has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Bomesc Offshore go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Bomesc Offshore
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.58 times more return on investment than Bomesc Offshore. However, Fujian Longzhou is 1.58 times more volatile than Bomesc Offshore Engineering. It trades about 0.05 of its potential returns per unit of risk. Bomesc Offshore Engineering is currently generating about -0.04 per unit of risk. If you would invest 347.00 in Fujian Longzhou Transportation on October 7, 2024 and sell it today you would earn a total of 51.00 from holding Fujian Longzhou Transportation or generate 14.7% 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. Bomesc Offshore Engineering
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Bomesc Offshore Engi |
Fujian Longzhou and Bomesc Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Bomesc Offshore
The main advantage of trading using opposite Fujian Longzhou and Bomesc Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Bomesc Offshore 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 Bomesc Offshore will offset losses from the drop in Bomesc Offshore's long position.| Fujian Longzhou vs. BeiGene | Fujian Longzhou vs. G bits Network Technology | Fujian Longzhou vs. China Mobile Limited | Fujian Longzhou vs. Gansu Jiu Steel |
| Bomesc Offshore vs. Zhejiang Kingland Pipeline | Bomesc Offshore vs. Gansu Jiu Steel | Bomesc Offshore vs. Shandong Mining Machinery | Bomesc Offshore vs. Aba Chemicals Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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