Correlation Between Changsha DIALINE and Qingdao Foods
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By analyzing existing cross correlation between Changsha DIALINE New and Qingdao Foods Co, you can compare the effects of market volatilities on Changsha DIALINE and Qingdao Foods 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 Changsha DIALINE with a short position of Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changsha DIALINE and Qingdao Foods.
Diversification Opportunities for Changsha DIALINE and Qingdao Foods
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changsha and Qingdao is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Changsha DIALINE New and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods and Changsha DIALINE 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 Changsha DIALINE New are associated (or correlated) with Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Changsha DIALINE i.e., Changsha DIALINE and Qingdao Foods go up and down completely randomly.
Pair Corralation between Changsha DIALINE and Qingdao Foods
Assuming the 90 days trading horizon Changsha DIALINE New is expected to generate 1.65 times more return on investment than Qingdao Foods. However, Changsha DIALINE is 1.65 times more volatile than Qingdao Foods Co. It trades about 0.17 of its potential returns per unit of risk. Qingdao Foods Co is currently generating about 0.21 per unit of risk. If you would invest 578.00 in Changsha DIALINE New on September 12, 2024 and sell it today you would earn a total of 327.00 from holding Changsha DIALINE New or generate 56.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changsha DIALINE New vs. Qingdao Foods Co
Performance |
| Timeline |
| Changsha DIALINE New |
| Qingdao Foods |
Changsha DIALINE and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changsha DIALINE and Qingdao Foods
The main advantage of trading using opposite Changsha DIALINE and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changsha DIALINE position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Changsha DIALINE vs. Liaoning Dingjide Petrochemical | Changsha DIALINE vs. Guangzhou Ruoyuchen Information | Changsha DIALINE vs. Daoming OpticsChemical Co | Changsha DIALINE vs. Westone Information Industry |
| Qingdao Foods vs. Zhejiang Xiantong RubberPlastic | Qingdao Foods vs. King Strong New Material | Qingdao Foods vs. Cangzhou Mingzhu Plastic | Qingdao Foods vs. Tonghua Grape Wine |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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