Correlation Between Lingyuan Iron and Guangdong Wens
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By analyzing existing cross correlation between Lingyuan Iron Steel and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on Lingyuan Iron and Guangdong Wens 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 Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingyuan Iron and Guangdong Wens.
Diversification Opportunities for Lingyuan Iron and Guangdong Wens
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lingyuan and Guangdong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lingyuan Iron Steel and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of Lingyuan Iron i.e., Lingyuan Iron and Guangdong Wens go up and down completely randomly.
Pair Corralation between Lingyuan Iron and Guangdong Wens
Assuming the 90 days trading horizon Lingyuan Iron Steel is expected to generate 1.2 times more return on investment than Guangdong Wens. However, Lingyuan Iron is 1.2 times more volatile than Guangdong Wens Foodstuff. It trades about 0.0 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.01 per unit of risk. If you would invest 229.00 in Lingyuan Iron Steel on September 4, 2024 and sell it today you would lose (21.00) from holding Lingyuan Iron Steel or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lingyuan Iron Steel vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| Lingyuan Iron Steel |
| Guangdong Wens Foodstuff |
Lingyuan Iron and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingyuan Iron and Guangdong Wens
The main advantage of trading using opposite Lingyuan Iron and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingyuan Iron position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| Lingyuan Iron vs. FSPG Hi Tech Co | Lingyuan Iron vs. Suzhou Mingzhi Technology | Lingyuan Iron vs. Jiangsu Yanghe Brewery | Lingyuan Iron vs. Guangdong Shenglu Telecommunication |
| Guangdong Wens vs. Lingyuan Iron Steel | Guangdong Wens vs. Changjiang Publishing Media | Guangdong Wens vs. StarPower Semiconductor | Guangdong Wens vs. Semiconductor Manufacturing Electronics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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