Correlation Between Fujian Wanchen and Guangdong Liantai
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By analyzing existing cross correlation between Fujian Wanchen Biotechnology and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Fujian Wanchen and Guangdong Liantai 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 Fujian Wanchen with a short position of Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Wanchen and Guangdong Liantai.
Diversification Opportunities for Fujian Wanchen and Guangdong Liantai
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fujian and Guangdong is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Wanchen Biotechnology and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai and Fujian Wanchen 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 Fujian Wanchen Biotechnology are associated (or correlated) with Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Fujian Wanchen i.e., Fujian Wanchen and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Fujian Wanchen and Guangdong Liantai
Assuming the 90 days trading horizon Fujian Wanchen Biotechnology is expected to under-perform the Guangdong Liantai. In addition to that, Fujian Wanchen is 1.52 times more volatile than Guangdong Liantai Environmental. It trades about -0.24 of its total potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about 0.09 per unit of volatility. If you would invest 391.00 in Guangdong Liantai Environmental on November 25, 2024 and sell it today you would earn a total of 6.00 from holding Guangdong Liantai Environmental or generate 1.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fujian Wanchen Biotechnology vs. Guangdong Liantai Environmenta
Performance |
Timeline |
Fujian Wanchen Biote |
Guangdong Liantai |
Fujian Wanchen and Guangdong Liantai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fujian Wanchen and Guangdong Liantai
The main advantage of trading using opposite Fujian Wanchen and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Wanchen position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.Fujian Wanchen vs. Ningbo Bohui Chemical | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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