Correlation Between Tongxing Environmental and Lingyuan Iron
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By analyzing existing cross correlation between Tongxing Environmental Protection and Lingyuan Iron Steel, you can compare the effects of market volatilities on Tongxing Environmental and Lingyuan Iron 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 Tongxing Environmental with a short position of Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and Lingyuan Iron.
Diversification Opportunities for Tongxing Environmental and Lingyuan Iron
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tongxing and Lingyuan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel and Tongxing Environmental 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 Tongxing Environmental Protection are associated (or correlated) with Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Tongxing Environmental i.e., Tongxing Environmental and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Tongxing Environmental and Lingyuan Iron
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to generate 0.99 times more return on investment than Lingyuan Iron. However, Tongxing Environmental Protection is 1.01 times less risky than Lingyuan Iron. It trades about 0.31 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.05 per unit of risk. If you would invest 1,436 in Tongxing Environmental Protection on August 28, 2024 and sell it today you would earn a total of 318.00 from holding Tongxing Environmental Protection or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Tongxing Environmental |
| Lingyuan Iron Steel |
Tongxing Environmental and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and Lingyuan Iron
The main advantage of trading using opposite Tongxing Environmental and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental position performs unexpectedly, Lingyuan Iron 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 Lingyuan Iron will offset losses from the drop in Lingyuan Iron's long position.| Tongxing Environmental vs. CITIC Metal Co | Tongxing Environmental vs. Rising Nonferrous Metals | Tongxing Environmental vs. Qinghaihuading Industrial Co | Tongxing Environmental vs. Jiangxi Naipu Mining |
| Lingyuan Iron vs. Niutech Environment Technology | Lingyuan Iron vs. CGN Nuclear Technology | Lingyuan Iron vs. Holitech Technology Co | Lingyuan Iron vs. Peoples Insurance of |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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