Correlation Between Fujian Longzhou and Shanghai Newtouch
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shanghai Newtouch Software, you can compare the effects of market volatilities on Fujian Longzhou and Shanghai Newtouch 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 Newtouch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shanghai Newtouch.
Diversification Opportunities for Fujian Longzhou and Shanghai Newtouch
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shanghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shanghai Newtouch Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Newtouch 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 Newtouch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Newtouch has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shanghai Newtouch go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shanghai Newtouch
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 0.92 times more return on investment than Shanghai Newtouch. However, Fujian Longzhou Transportation is 1.08 times less risky than Shanghai Newtouch. It trades about -0.37 of its potential returns per unit of risk. Shanghai Newtouch Software is currently generating about -0.4 per unit of risk. If you would invest 552.00 in Fujian Longzhou Transportation on October 11, 2024 and sell it today you would lose (140.00) from holding Fujian Longzhou Transportation or give up 25.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shanghai Newtouch Software
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shanghai Newtouch |
Fujian Longzhou and Shanghai Newtouch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shanghai Newtouch
The main advantage of trading using opposite Fujian Longzhou and Shanghai Newtouch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shanghai Newtouch 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 Newtouch will offset losses from the drop in Shanghai Newtouch'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 |
| Shanghai Newtouch vs. Unisplendour Corp | Shanghai Newtouch vs. Jiangxi Hengda Hi Tech | Shanghai Newtouch vs. Shanghai Shibei Hi Tech | Shanghai Newtouch vs. Maccura Biotechnology 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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