Correlation Between Fujian Longzhou and Sinosteel Luonai
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Fujian Longzhou and Sinosteel Luonai 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 Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Sinosteel Luonai.
Diversification Opportunities for Fujian Longzhou and Sinosteel Luonai
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fujian and Sinosteel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat 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 Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Sinosteel Luonai
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.7 times more return on investment than Sinosteel Luonai. However, Fujian Longzhou is 1.7 times more volatile than Sinosteel Luonai Materials. It trades about 0.04 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about -0.03 per unit of risk. If you would invest 403.00 in Fujian Longzhou Transportation on August 31, 2024 and sell it today you would earn a total of 129.00 from holding Fujian Longzhou Transportation or generate 32.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Sinosteel Luonai Mat |
Fujian Longzhou and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Sinosteel Luonai
The main advantage of trading using opposite Fujian Longzhou and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai's long position.| Fujian Longzhou vs. Cultural Investment Holdings | Fujian Longzhou vs. Gome Telecom Equipment | Fujian Longzhou vs. Bus Online Co | Fujian Longzhou vs. Holitech Technology Co |
| Sinosteel Luonai vs. Chongqing Shunbo Aluminum | Sinosteel Luonai vs. Allwin Telecommunication Co | Sinosteel Luonai vs. Tongyu Communication | Sinosteel Luonai vs. Shaanxi Meineng Clean |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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