Correlation Between Liuzhou Chemical and Zhongshan Broad
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Liuzhou Chemical and Zhongshan Broad 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 Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Zhongshan Broad.
Diversification Opportunities for Liuzhou Chemical and Zhongshan Broad
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liuzhou and Zhongshan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Zhongshan Broad
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.63 times more return on investment than Zhongshan Broad. However, Liuzhou Chemical is 1.63 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.18 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about -0.02 per unit of risk. If you would invest 284.00 in Liuzhou Chemical Industry on September 20, 2024 and sell it today you would earn a total of 30.00 from holding Liuzhou Chemical Industry or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Zhongshan Broad Ocean |
Liuzhou Chemical and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Zhongshan Broad
The main advantage of trading using opposite Liuzhou Chemical and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad's long position.| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining |
| Zhongshan Broad vs. Cofco Biochemical Anhui | Zhongshan Broad vs. Liuzhou Chemical Industry | Zhongshan Broad vs. Gan Yuan Foods | Zhongshan Broad vs. JuneYao Dairy Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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