Correlation Between Fujian Longzhou and Tianjin Silvery
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Fujian Longzhou and Tianjin Silvery 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 Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Tianjin Silvery.
Diversification Opportunities for Fujian Longzhou and Tianjin Silvery
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Tianjin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon 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 Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Tianjin Silvery go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Tianjin Silvery
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.59 times more return on investment than Tianjin Silvery. However, Fujian Longzhou is 1.59 times more volatile than Tianjin Silvery Dragon. It trades about 0.03 of its potential returns per unit of risk. Tianjin Silvery Dragon is currently generating about 0.03 per unit of risk. If you would invest 468.00 in Fujian Longzhou Transportation on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Fujian Longzhou Transportation or generate 17.95% 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. Tianjin Silvery Dragon
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Tianjin Silvery Dragon |
Fujian Longzhou and Tianjin Silvery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Tianjin Silvery
The main advantage of trading using opposite Fujian Longzhou and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Tianjin Silvery 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 Tianjin Silvery will offset losses from the drop in Tianjin Silvery's long position.| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. PetroChina Co Ltd |
| Tianjin Silvery vs. Zijin Mining Group | Tianjin Silvery vs. Wanhua Chemical Group | Tianjin Silvery vs. Baoshan Iron Steel | Tianjin Silvery vs. Rongsheng Petrochemical Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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