Correlation Between Lingyuan Iron and Cangzhou Mingzhu
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By analyzing existing cross correlation between Lingyuan Iron Steel and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on Lingyuan Iron and Cangzhou Mingzhu 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 Lingyuan Iron with a short position of Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingyuan Iron and Cangzhou Mingzhu.
Diversification Opportunities for Lingyuan Iron and Cangzhou Mingzhu
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lingyuan and Cangzhou is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lingyuan Iron Steel and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic and Lingyuan Iron 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 Lingyuan Iron Steel are associated (or correlated) with Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of Lingyuan Iron i.e., Lingyuan Iron and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between Lingyuan Iron and Cangzhou Mingzhu
Assuming the 90 days trading horizon Lingyuan Iron Steel is expected to generate 1.23 times more return on investment than Cangzhou Mingzhu. However, Lingyuan Iron is 1.23 times more volatile than Cangzhou Mingzhu Plastic. It trades about 0.01 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about -0.01 per unit of risk. If you would invest 217.00 in Lingyuan Iron Steel on August 31, 2024 and sell it today you would lose (12.00) from holding Lingyuan Iron Steel or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Lingyuan Iron Steel vs. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| Lingyuan Iron Steel |
| Cangzhou Mingzhu Plastic |
Lingyuan Iron and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingyuan Iron and Cangzhou Mingzhu
The main advantage of trading using opposite Lingyuan Iron and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingyuan Iron position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.| Lingyuan Iron vs. Guangzhou Automobile Group | Lingyuan Iron vs. Pengxin International Mining | Lingyuan Iron vs. Zhejiang Qianjiang Motorcycle | Lingyuan Iron vs. Shengda Mining Co |
| Cangzhou Mingzhu vs. AVIC Fund Management | Cangzhou Mingzhu vs. Lingyuan Iron Steel | Cangzhou Mingzhu vs. Aofu Environmental Technology | Cangzhou Mingzhu vs. JCHX Mining Management |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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