Correlation Between YiDong Electronics and Longjian Road
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By analyzing existing cross correlation between YiDong Electronics Technology and Longjian Road Bridge, you can compare the effects of market volatilities on YiDong Electronics and Longjian Road 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 YiDong Electronics with a short position of Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of YiDong Electronics and Longjian Road.
Diversification Opportunities for YiDong Electronics and Longjian Road
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YiDong and Longjian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding YiDong Electronics Technology and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge and YiDong Electronics 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 YiDong Electronics Technology are associated (or correlated) with Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of YiDong Electronics i.e., YiDong Electronics and Longjian Road go up and down completely randomly.
Pair Corralation between YiDong Electronics and Longjian Road
Assuming the 90 days trading horizon YiDong Electronics is expected to generate 2.87 times less return on investment than Longjian Road. In addition to that, YiDong Electronics is 1.17 times more volatile than Longjian Road Bridge. It trades about 0.01 of its total potential returns per unit of risk. Longjian Road Bridge is currently generating about 0.04 per unit of volatility. If you would invest 298.00 in Longjian Road Bridge on September 13, 2024 and sell it today you would earn a total of 136.00 from holding Longjian Road Bridge or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YiDong Electronics Technology vs. Longjian Road Bridge
Performance |
| Timeline |
| YiDong Electronics |
| Longjian Road Bridge |
YiDong Electronics and Longjian Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YiDong Electronics and Longjian Road
The main advantage of trading using opposite YiDong Electronics and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YiDong Electronics position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.| YiDong Electronics vs. Industrial and Commercial | YiDong Electronics vs. Agricultural Bank of | YiDong Electronics vs. China Construction Bank | YiDong Electronics vs. Bank of China |
| Longjian Road vs. Leyard Optoelectronic | Longjian Road vs. Vontron Technology Co | Longjian Road vs. Sanan Optoelectronics Co | Longjian Road vs. YiDong Electronics Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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