Correlation Between Fujian Longzhou and Shanghai Yanpu
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Fujian Longzhou and Shanghai Yanpu 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 Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shanghai Yanpu.
Diversification Opportunities for Fujian Longzhou and Shanghai Yanpu
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shanghai is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal 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 Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shanghai Yanpu
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Shanghai Yanpu. In addition to that, Fujian Longzhou is 2.35 times more volatile than Shanghai Yanpu Metal. It trades about -0.04 of its total potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.15 per unit of volatility. If you would invest 3,654 in Shanghai Yanpu Metal on October 22, 2024 and sell it today you would earn a total of 150.00 from holding Shanghai Yanpu Metal or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shanghai Yanpu Metal |
Fujian Longzhou and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shanghai Yanpu
The main advantage of trading using opposite Fujian Longzhou and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shanghai Yanpu 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 Shanghai Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| Fujian Longzhou vs. Jiugui Liquor Co | Fujian Longzhou vs. Anhui Huaheng Biotechnology | Fujian Longzhou vs. Financial Street Holdings | Fujian Longzhou vs. Jinhui Liquor Co |
| Shanghai Yanpu vs. Montage Technology Co | Shanghai Yanpu vs. Giantec Semiconductor Corp | Shanghai Yanpu vs. Will Semiconductor Co | Shanghai Yanpu vs. Semiconductor Manufacturing Intl |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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