Correlation Between Longmaster Information and Shandong Polymer
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By analyzing existing cross correlation between Longmaster Information Tech and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Longmaster Information and Shandong Polymer 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 Longmaster Information with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longmaster Information and Shandong Polymer.
Diversification Opportunities for Longmaster Information and Shandong Polymer
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Longmaster and Shandong is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Longmaster Information Tech and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Longmaster Information 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 Longmaster Information Tech are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Longmaster Information i.e., Longmaster Information and Shandong Polymer go up and down completely randomly.
Pair Corralation between Longmaster Information and Shandong Polymer
Assuming the 90 days trading horizon Longmaster Information Tech is expected to under-perform the Shandong Polymer. In addition to that, Longmaster Information is 1.14 times more volatile than Shandong Polymer Biochemicals. It trades about 0.0 of its total potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.03 per unit of volatility. If you would invest 390.00 in Shandong Polymer Biochemicals on October 14, 2024 and sell it today you would earn a total of 11.00 from holding Shandong Polymer Biochemicals or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longmaster Information Tech vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Longmaster Information |
| Shandong Polymer Bio |
Longmaster Information and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longmaster Information and Shandong Polymer
The main advantage of trading using opposite Longmaster Information and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longmaster Information position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.The idea behind Longmaster Information Tech and Shandong Polymer Biochemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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