Correlation Between China Minsheng and Long Yuan
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By analyzing existing cross correlation between China Minsheng Banking and Long Yuan Construction, you can compare the effects of market volatilities on China Minsheng and Long Yuan 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 China Minsheng with a short position of Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Minsheng and Long Yuan.
Diversification Opportunities for China Minsheng and Long Yuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Long is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Minsheng Banking and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction and China Minsheng 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 China Minsheng Banking are associated (or correlated) with Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of China Minsheng i.e., China Minsheng and Long Yuan go up and down completely randomly.
Pair Corralation between China Minsheng and Long Yuan
Assuming the 90 days trading horizon China Minsheng Banking is expected to generate 0.61 times more return on investment than Long Yuan. However, China Minsheng Banking is 1.63 times less risky than Long Yuan. It trades about 0.04 of its potential returns per unit of risk. Long Yuan Construction is currently generating about -0.1 per unit of risk. If you would invest 388.00 in China Minsheng Banking on August 29, 2024 and sell it today you would earn a total of 5.00 from holding China Minsheng Banking or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Minsheng Banking vs. Long Yuan Construction
Performance |
| Timeline |
| China Minsheng Banking |
| Long Yuan Construction |
China Minsheng and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Minsheng and Long Yuan
The main advantage of trading using opposite China Minsheng and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Minsheng position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| China Minsheng vs. Shenwu Energy Saving | China Minsheng vs. Unisplendour Corp | China Minsheng vs. Linewell Software Co | China Minsheng vs. Peoples Insurance of |
| Long Yuan vs. Ming Yang Smart | Long Yuan vs. 159681 | Long Yuan vs. 159005 | Long Yuan vs. Loctek Ergonomic 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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