Correlation Between Liuzhou Chemical and Shanghai Yaoji
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Shanghai Yaoji Playing, you can compare the effects of market volatilities on Liuzhou Chemical and Shanghai Yaoji 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 Shanghai Yaoji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Shanghai Yaoji.
Diversification Opportunities for Liuzhou Chemical and Shanghai Yaoji
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liuzhou and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Shanghai Yaoji Playing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaoji Playing 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 Shanghai Yaoji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaoji Playing has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Shanghai Yaoji go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Shanghai Yaoji
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 0.69 times more return on investment than Shanghai Yaoji. However, Liuzhou Chemical Industry is 1.44 times less risky than Shanghai Yaoji. It trades about 0.12 of its potential returns per unit of risk. Shanghai Yaoji Playing is currently generating about 0.08 per unit of risk. If you would invest 286.00 in Liuzhou Chemical Industry on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Liuzhou Chemical Industry or generate 7.34% 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. Shanghai Yaoji Playing
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Shanghai Yaoji Playing |
Liuzhou Chemical and Shanghai Yaoji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Shanghai Yaoji
The main advantage of trading using opposite Liuzhou Chemical and Shanghai Yaoji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Shanghai Yaoji 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 Shanghai Yaoji will offset losses from the drop in Shanghai Yaoji'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 |
| Shanghai Yaoji vs. Shenzhen MYS Environmental | Shanghai Yaoji vs. AVIC Fund Management | Shanghai Yaoji vs. Shenzhen Bingchuan Network | Shanghai Yaoji vs. Penghua Shenzhen Energy |
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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