Correlation Between Guangzhou Tinci and Longxing Chemical
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By analyzing existing cross correlation between Guangzhou Tinci Materials and Longxing Chemical Stock, you can compare the effects of market volatilities on Guangzhou Tinci and Longxing Chemical 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 Guangzhou Tinci with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Tinci and Longxing Chemical.
Diversification Opportunities for Guangzhou Tinci and Longxing Chemical
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Longxing is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Tinci Materials and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Guangzhou Tinci 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 Guangzhou Tinci Materials are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Guangzhou Tinci i.e., Guangzhou Tinci and Longxing Chemical go up and down completely randomly.
Pair Corralation between Guangzhou Tinci and Longxing Chemical
Assuming the 90 days trading horizon Guangzhou Tinci is expected to generate 1.71 times less return on investment than Longxing Chemical. But when comparing it to its historical volatility, Guangzhou Tinci Materials is 1.77 times less risky than Longxing Chemical. It trades about 0.1 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 534.00 in Longxing Chemical Stock on November 6, 2024 and sell it today you would earn a total of 22.00 from holding Longxing Chemical Stock or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Tinci Materials vs. Longxing Chemical Stock
Performance |
| Timeline |
| Guangzhou Tinci Materials |
| Longxing Chemical Stock |
Guangzhou Tinci and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Tinci and Longxing Chemical
The main advantage of trading using opposite Guangzhou Tinci and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Tinci position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Guangzhou Tinci vs. Tongyu Communication | Guangzhou Tinci vs. Sharetronic Data Technology | Guangzhou Tinci vs. Dawning Information Industry | Guangzhou Tinci vs. Eastern Communications Co |
| Longxing Chemical vs. Ziel Home Furnishing | Longxing Chemical vs. Zoy Home Furnishing | Longxing Chemical vs. Panda Financial Holding | Longxing Chemical vs. Hangzhou Arcvideo Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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