Correlation Between Fujian Longzhou and Zhengping RoadBridge
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Zhengping RoadBridge Constr, you can compare the effects of market volatilities on Fujian Longzhou and Zhengping RoadBridge 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 Zhengping RoadBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Zhengping RoadBridge.
Diversification Opportunities for Fujian Longzhou and Zhengping RoadBridge
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Zhengping is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Zhengping RoadBridge Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengping RoadBridge 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 Zhengping RoadBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengping RoadBridge has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Zhengping RoadBridge go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Zhengping RoadBridge
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Zhengping RoadBridge. But the stock apears to be less risky and, when comparing its historical volatility, Fujian Longzhou Transportation is 1.26 times less risky than Zhengping RoadBridge. The stock trades about -0.13 of its potential returns per unit of risk. The Zhengping RoadBridge Constr is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 313.00 in Zhengping RoadBridge Constr on October 11, 2024 and sell it today you would earn a total of 56.00 from holding Zhengping RoadBridge Constr or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Zhengping RoadBridge Constr
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Zhengping RoadBridge |
Fujian Longzhou and Zhengping RoadBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Zhengping RoadBridge
The main advantage of trading using opposite Fujian Longzhou and Zhengping RoadBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Zhengping RoadBridge 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 Zhengping RoadBridge will offset losses from the drop in Zhengping RoadBridge's long position.| Fujian Longzhou vs. AVCON Information Tech | Fujian Longzhou vs. CITIC Guoan Information | Fujian Longzhou vs. Sublime China Information | Fujian Longzhou vs. Digital China Information |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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