Correlation Between Markor International and China Longyuan
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By analyzing existing cross correlation between Markor International Home and China Longyuan Power, you can compare the effects of market volatilities on Markor International and China Longyuan 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 Markor International with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and China Longyuan.
Diversification Opportunities for Markor International and China Longyuan
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Markor and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Markor International 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 Markor International Home are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Markor International i.e., Markor International and China Longyuan go up and down completely randomly.
Pair Corralation between Markor International and China Longyuan
Assuming the 90 days trading horizon Markor International Home is expected to under-perform the China Longyuan. In addition to that, Markor International is 1.77 times more volatile than China Longyuan Power. It trades about -0.03 of its total potential returns per unit of risk. China Longyuan Power is currently generating about -0.04 per unit of volatility. If you would invest 1,928 in China Longyuan Power on November 5, 2024 and sell it today you would lose (428.00) from holding China Longyuan Power or give up 22.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Markor International Home vs. China Longyuan Power
Performance |
| Timeline |
| Markor International Home |
| China Longyuan Power |
Markor International and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markor International and China Longyuan
The main advantage of trading using opposite Markor International and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markor International position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.The idea behind Markor International Home and China Longyuan Power pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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