Correlation Between Long Bon and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both Long Bon and Chainqui Construction at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Long Bon and Chainqui Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Bon International and Chainqui Construction Development, you can compare the effects of market volatilities on Long Bon and Chainqui Construction 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 Long Bon with a short position of Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Bon and Chainqui Construction.
Diversification Opportunities for Long Bon and Chainqui Construction
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Long and Chainqui is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Long Bon International and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction and Long Bon 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 Long Bon International are associated (or correlated) with Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of Long Bon i.e., Long Bon and Chainqui Construction go up and down completely randomly.
Pair Corralation between Long Bon and Chainqui Construction
Assuming the 90 days trading horizon Long Bon International is expected to generate 0.74 times more return on investment than Chainqui Construction. However, Long Bon International is 1.35 times less risky than Chainqui Construction. It trades about -0.34 of its potential returns per unit of risk. Chainqui Construction Development is currently generating about -0.27 per unit of risk. If you would invest 2,130 in Long Bon International on September 23, 2024 and sell it today you would lose (155.00) from holding Long Bon International or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Bon International vs. Chainqui Construction Developm
Performance |
| Timeline |
| Long Bon International |
| Chainqui Construction |
Long Bon and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Bon and Chainqui Construction
The main advantage of trading using opposite Long Bon and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Bon position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction's long position.| Long Bon vs. Hung Sheng Construction | Long Bon vs. Chainqui Construction Development | Long Bon vs. BES Engineering Co | Long Bon vs. Sincere Navigation Corp |
| Chainqui Construction vs. Yang Ming Marine | Chainqui Construction vs. Evergreen Marine Corp | Chainqui Construction vs. Eva Airways Corp | Chainqui Construction vs. U Ming Marine Transport |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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