Correlation Between Yingde Greatchem and Fujian Newland
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Fujian Newland Computer, you can compare the effects of market volatilities on Yingde Greatchem and Fujian Newland 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 Yingde Greatchem with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Fujian Newland.
Diversification Opportunities for Yingde Greatchem and Fujian Newland
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yingde and Fujian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Fujian Newland go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Fujian Newland
Assuming the 90 days trading horizon Yingde Greatchem is expected to generate 2.01 times less return on investment than Fujian Newland. But when comparing it to its historical volatility, Yingde Greatchem Chemicals is 1.17 times less risky than Fujian Newland. It trades about 0.1 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,539 in Fujian Newland Computer on August 28, 2024 and sell it today you would earn a total of 399.00 from holding Fujian Newland Computer or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Fujian Newland Computer
Performance |
| Timeline |
| Yingde Greatchem Che |
| Fujian Newland Computer |
Yingde Greatchem and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Fujian Newland
The main advantage of trading using opposite Yingde Greatchem and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Yingde Greatchem vs. Xingguang Agricultural Mach | Yingde Greatchem vs. Anhui Deli Household | Yingde Greatchem vs. Long Yuan Construction | Yingde Greatchem vs. Lutian Machinery Co |
| Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Bank of China | Fujian Newland vs. PetroChina Co Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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