Correlation Between Dongguan Tarry and Longxing Chemical
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By analyzing existing cross correlation between Dongguan Tarry Electronics and Longxing Chemical Stock, you can compare the effects of market volatilities on Dongguan Tarry and Longxing Chemical 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 Dongguan Tarry with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongguan Tarry and Longxing Chemical.
Diversification Opportunities for Dongguan Tarry and Longxing Chemical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongguan and Longxing is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dongguan Tarry Electronics and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Dongguan Tarry 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 Dongguan Tarry Electronics are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Dongguan Tarry i.e., Dongguan Tarry and Longxing Chemical go up and down completely randomly.
Pair Corralation between Dongguan Tarry and Longxing Chemical
Assuming the 90 days trading horizon Dongguan Tarry Electronics is expected to generate 1.14 times more return on investment than Longxing Chemical. However, Dongguan Tarry is 1.14 times more volatile than Longxing Chemical Stock. It trades about 0.11 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.0 per unit of risk. If you would invest 5,955 in Dongguan Tarry Electronics on October 30, 2024 and sell it today you would earn a total of 948.00 from holding Dongguan Tarry Electronics or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongguan Tarry Electronics vs. Longxing Chemical Stock
Performance |
| Timeline |
| Dongguan Tarry Elect |
| Longxing Chemical Stock |
Dongguan Tarry and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongguan Tarry and Longxing Chemical
The main advantage of trading using opposite Dongguan Tarry and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongguan Tarry position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Dongguan Tarry vs. Anhui Jianghuai Automobile | Dongguan Tarry vs. Shanghai Jinfeng Wine | Dongguan Tarry vs. Tonghua Grape Wine | Dongguan Tarry vs. Queclink Wireless Solutions |
| Longxing Chemical vs. Suzhou Xingye Material | Longxing Chemical vs. Guangzhou Tinci Materials | Longxing Chemical vs. Ping An Insurance | Longxing Chemical vs. Highbroad Advanced Material |
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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