Correlation Between Lingyuan Iron and Changjiang Jinggong
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By analyzing existing cross correlation between Lingyuan Iron Steel and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Lingyuan Iron and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingyuan Iron and Changjiang Jinggong.
Diversification Opportunities for Lingyuan Iron and Changjiang Jinggong
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lingyuan and Changjiang is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Lingyuan Iron Steel and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Lingyuan Iron i.e., Lingyuan Iron and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Lingyuan Iron and Changjiang Jinggong
Assuming the 90 days trading horizon Lingyuan Iron Steel is expected to generate 1.76 times more return on investment than Changjiang Jinggong. However, Lingyuan Iron is 1.76 times more volatile than Changjiang Jinggong Steel. It trades about 0.14 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about 0.06 per unit of risk. If you would invest 188.00 in Lingyuan Iron Steel on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Lingyuan Iron Steel or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lingyuan Iron Steel vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| Lingyuan Iron Steel |
| Changjiang Jinggong Steel |
Lingyuan Iron and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingyuan Iron and Changjiang Jinggong
The main advantage of trading using opposite Lingyuan Iron and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingyuan Iron position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Lingyuan Iron vs. State Grid InformationCommunication | Lingyuan Iron vs. Meinian Onehealth Healthcare | Lingyuan Iron vs. Northking Information Technology | Lingyuan Iron vs. YLZ Information Tech |
| Changjiang Jinggong vs. Shenzhen MTC Co | Changjiang Jinggong vs. Ming Yang Smart | Changjiang Jinggong vs. Changzhou Almaden Co | Changjiang Jinggong vs. 159681 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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