Correlation Between Levima Advanced and Chongqing Road
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By analyzing existing cross correlation between Levima Advanced Materials and Chongqing Road Bridge, you can compare the effects of market volatilities on Levima Advanced and Chongqing Road 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 Levima Advanced with a short position of Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levima Advanced and Chongqing Road.
Diversification Opportunities for Levima Advanced and Chongqing Road
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Levima and Chongqing is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Levima Advanced Materials and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge and Levima Advanced 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 Levima Advanced Materials are associated (or correlated) with Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Levima Advanced i.e., Levima Advanced and Chongqing Road go up and down completely randomly.
Pair Corralation between Levima Advanced and Chongqing Road
Assuming the 90 days trading horizon Levima Advanced Materials is expected to under-perform the Chongqing Road. But the stock apears to be less risky and, when comparing its historical volatility, Levima Advanced Materials is 1.09 times less risky than Chongqing Road. The stock trades about -0.04 of its potential returns per unit of risk. The Chongqing Road Bridge is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 521.00 in Chongqing Road Bridge on September 3, 2024 and sell it today you would earn a total of 147.00 from holding Chongqing Road Bridge or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levima Advanced Materials vs. Chongqing Road Bridge
Performance |
| Timeline |
| Levima Advanced Materials |
| Chongqing Road Bridge |
Levima Advanced and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levima Advanced and Chongqing Road
The main advantage of trading using opposite Levima Advanced and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levima Advanced position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.| Levima Advanced vs. Zijin Mining Group | Levima Advanced vs. Baoshan Iron Steel | Levima Advanced vs. Rongsheng Petrochemical Co | Levima Advanced vs. Hoshine Silicon Ind |
| Chongqing Road vs. Jiahe Foods Industry | Chongqing Road vs. Xiwang Foodstuffs Co | Chongqing Road vs. Zhongshan Public Utilities | Chongqing Road vs. Jiajia Food 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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