Correlation Between Inner Mongolia and Longxing Chemical
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Longxing Chemical Stock, you can compare the effects of market volatilities on Inner Mongolia 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 Inner Mongolia with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Longxing Chemical.
Diversification Opportunities for Inner Mongolia and Longxing Chemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and Longxing is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou 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 Inner Mongolia 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 Inner Mongolia BaoTou 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 Inner Mongolia i.e., Inner Mongolia and Longxing Chemical go up and down completely randomly.
Pair Corralation between Inner Mongolia and Longxing Chemical
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 2.32 times less return on investment than Longxing Chemical. In addition to that, Inner Mongolia is 1.42 times more volatile than Longxing Chemical Stock. It trades about 0.08 of its total potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.27 per unit of volatility. If you would invest 495.00 in Longxing Chemical Stock on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Longxing Chemical Stock or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Longxing Chemical Stock
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Longxing Chemical Stock |
Inner Mongolia and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Longxing Chemical
The main advantage of trading using opposite Inner Mongolia and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia 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.| Inner Mongolia vs. Zijin Mining Group | Inner Mongolia vs. Baoshan Iron Steel | Inner Mongolia vs. Rongsheng Petrochemical Co | Inner Mongolia vs. Hoshine Silicon Ind |
| Longxing Chemical vs. Guangdong Liantai Environmental | Longxing Chemical vs. Hengli Industrial Development | Longxing Chemical vs. Lingyuan Iron Steel | Longxing Chemical vs. Dongjiang Environmental Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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