Correlation Between Contec Medical and Fujian Longzhou
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By analyzing existing cross correlation between Contec Medical Systems and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Contec Medical and Fujian Longzhou 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 Contec Medical with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contec Medical and Fujian Longzhou.
Diversification Opportunities for Contec Medical and Fujian Longzhou
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Contec and Fujian is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Contec Medical Systems and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Contec Medical 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 Contec Medical Systems are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Contec Medical i.e., Contec Medical and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Contec Medical and Fujian Longzhou
Assuming the 90 days trading horizon Contec Medical Systems is expected to under-perform the Fujian Longzhou. But the stock apears to be less risky and, when comparing its historical volatility, Contec Medical Systems is 1.54 times less risky than Fujian Longzhou. The stock trades about -0.14 of its potential returns per unit of risk. The Fujian Longzhou Transportation is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Fujian Longzhou Transportation on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Fujian Longzhou Transportation or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contec Medical Systems vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Contec Medical Systems |
| Fujian Longzhou Tran |
Contec Medical and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contec Medical and Fujian Longzhou
The main advantage of trading using opposite Contec Medical and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contec Medical position performs unexpectedly, Fujian Longzhou 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 Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Contec Medical vs. Industrial and Commercial | Contec Medical vs. China Construction Bank | Contec Medical vs. Agricultural Bank of | Contec Medical vs. Bank of China |
| Fujian Longzhou vs. PetroChina Co Ltd | Fujian Longzhou vs. China State Construction | Fujian Longzhou vs. China Mobile Limited | Fujian Longzhou vs. Industrial and Commercial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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