Correlation Between Liuzhou Chemical and China Sports
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By analyzing existing cross correlation between Liuzhou Chemical Industry and China Sports Industry, you can compare the effects of market volatilities on Liuzhou Chemical and China Sports 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 China Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and China Sports.
Diversification Opportunities for Liuzhou Chemical and China Sports
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Liuzhou and China is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and China Sports Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sports Industry 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 China Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sports Industry has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and China Sports go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and China Sports
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 3.38 times more return on investment than China Sports. However, Liuzhou Chemical is 3.38 times more volatile than China Sports Industry. It trades about 0.06 of its potential returns per unit of risk. China Sports Industry is currently generating about -0.16 per unit of risk. If you would invest 291.00 in Liuzhou Chemical Industry on October 31, 2024 and sell it today you would earn a total of 11.00 from holding Liuzhou Chemical Industry or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. China Sports Industry
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| China Sports Industry |
Liuzhou Chemical and China Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and China Sports
The main advantage of trading using opposite Liuzhou Chemical and China Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, China Sports 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 Sports will offset losses from the drop in China Sports' long position.| Liuzhou Chemical vs. Jiajia Food Group | Liuzhou Chemical vs. Anyang Iron Steel | Liuzhou Chemical vs. Xiwang Foodstuffs Co | Liuzhou Chemical vs. Shenzhen MYS Environmental |
| China Sports vs. Hengli Petrochemical Co | China Sports vs. Panda Financial Holding | China Sports vs. GRG Banking Equipment | China Sports vs. Xiangtan Electrochemical Scientific |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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