Correlation Between Fujian Longzhou and Liaoning Chengda
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Fujian Longzhou and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Liaoning Chengda.
Diversification Opportunities for Fujian Longzhou and Liaoning Chengda
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Liaoning is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Liaoning Chengda
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Liaoning Chengda. In addition to that, Fujian Longzhou is 4.43 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.04 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.08 per unit of volatility. If you would invest 2,696 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (55.00) from holding Liaoning Chengda Biotechnology or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Liaoning Chengda Bio |
Fujian Longzhou and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Liaoning Chengda
The main advantage of trading using opposite Fujian Longzhou and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Fujian Longzhou vs. Chengdu Kanghua Biological | Fujian Longzhou vs. Beijing Wantai Biological | Fujian Longzhou vs. Suzhou Novoprotein Scientific | Fujian Longzhou vs. Aluminum Corp of |
| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. Agricultural Bank of | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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