Correlation Between Fujian Longzhou and Shanghai CEO
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shanghai CEO Environmental, you can compare the effects of market volatilities on Fujian Longzhou and Shanghai CEO 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 CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shanghai CEO.
Diversification Opportunities for Fujian Longzhou and Shanghai CEO
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Shanghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shanghai CEO go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shanghai CEO
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Shanghai CEO. In addition to that, Fujian Longzhou is 1.21 times more volatile than Shanghai CEO Environmental. It trades about -0.03 of its total potential returns per unit of risk. Shanghai CEO Environmental is currently generating about -0.03 per unit of volatility. If you would invest 1,301 in Shanghai CEO Environmental on October 30, 2024 and sell it today you would lose (438.00) from holding Shanghai CEO Environmental or give up 33.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shanghai CEO Environmental
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shanghai CEO Environ |
Fujian Longzhou and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shanghai CEO
The main advantage of trading using opposite Fujian Longzhou and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shanghai CEO 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 CEO will offset losses from the drop in Shanghai CEO's long position.| Fujian Longzhou vs. Giantec Semiconductor Corp | Fujian Longzhou vs. Union Semiconductor Co | Fujian Longzhou vs. Eyebright Medical Technology | Fujian Longzhou vs. Montage Technology Co |
| Shanghai CEO vs. China Petroleum Chemical | Shanghai CEO vs. PetroChina Co Ltd | Shanghai CEO vs. China State Construction | Shanghai CEO vs. China Railway Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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