Correlation Between Gansu Jiu and Fujian Longzhou
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By analyzing existing cross correlation between Gansu Jiu Steel and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Gansu Jiu and Fujian Longzhou 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 Gansu Jiu with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Fujian Longzhou.
Diversification Opportunities for Gansu Jiu and Fujian Longzhou
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Fujian is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Gansu Jiu and Fujian Longzhou
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Fujian Longzhou. But the stock apears to be less risky and, when comparing its historical volatility, Gansu Jiu Steel is 1.62 times less risky than Fujian Longzhou. The stock trades about -0.25 of its potential returns per unit of risk. The Fujian Longzhou Transportation is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Fujian Longzhou Transportation on October 23, 2024 and sell it today you would lose (16.00) from holding Fujian Longzhou Transportation or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Gansu Jiu Steel |
| Fujian Longzhou Tran |
Gansu Jiu and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Fujian Longzhou
The main advantage of trading using opposite Gansu Jiu and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Gansu Jiu vs. GRINM Semiconductor Materials | Gansu Jiu vs. TianJin 712 Communication | Gansu Jiu vs. Bank of Communications | Gansu Jiu vs. China Sports Industry |
| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. PetroChina Co Ltd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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