Correlation Between Liuzhou Chemical and Advanced Technology
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Advanced Technology Materials, you can compare the effects of market volatilities on Liuzhou Chemical and Advanced Technology 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 Liuzhou Chemical with a short position of Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Advanced Technology.
Diversification Opportunities for Liuzhou Chemical and Advanced Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liuzhou and Advanced is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Advanced Technology go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Advanced Technology
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to under-perform the Advanced Technology. In addition to that, Liuzhou Chemical is 1.07 times more volatile than Advanced Technology Materials. It trades about -0.01 of its total potential returns per unit of risk. Advanced Technology Materials is currently generating about 0.03 per unit of volatility. If you would invest 843.00 in Advanced Technology Materials on October 14, 2024 and sell it today you would earn a total of 247.00 from holding Advanced Technology Materials or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Advanced Technology Materials
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Advanced Technology |
Liuzhou Chemical and Advanced Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Advanced Technology
The main advantage of trading using opposite Liuzhou Chemical and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Advanced Technology 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.| Liuzhou Chemical vs. Hefei Metalforming Mach | Liuzhou Chemical vs. Fujian Nanwang Environment | Liuzhou Chemical vs. Hangzhou Guotai Environmental | Liuzhou Chemical vs. Gansu Jiu Steel |
| Advanced Technology vs. Dosilicon Co | Advanced Technology vs. Guangzhou Jointas Chemical | Advanced Technology vs. Hunan Tyen Machinery | Advanced Technology vs. Liuzhou Chemical Industry |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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