Correlation Between Long Yuan and City Development
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By analyzing existing cross correlation between Long Yuan Construction and City Development Environment, you can compare the effects of market volatilities on Long Yuan and City Development 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 Long Yuan with a short position of City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and City Development.
Diversification Opportunities for Long Yuan and City Development
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Long and City is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env and Long Yuan 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 Long Yuan Construction are associated (or correlated) with City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Long Yuan i.e., Long Yuan and City Development go up and down completely randomly.
Pair Corralation between Long Yuan and City Development
Assuming the 90 days trading horizon Long Yuan Construction is expected to under-perform the City Development. In addition to that, Long Yuan is 1.31 times more volatile than City Development Environment. It trades about -0.02 of its total potential returns per unit of risk. City Development Environment is currently generating about 0.03 per unit of volatility. If you would invest 1,010 in City Development Environment on October 27, 2024 and sell it today you would earn a total of 259.00 from holding City Development Environment or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. City Development Environment
Performance |
| Timeline |
| Long Yuan Construction |
| City Development Env |
Long Yuan and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and City Development
The main advantage of trading using opposite Long Yuan and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.| Long Yuan vs. Shanghai Broadband Technology | Long Yuan vs. Liaoning Chengda Biotechnology | Long Yuan vs. Ningbo MedicalSystem Biotechnology | Long Yuan vs. Chengdu Xinzhu RoadBridge |
| City Development vs. Sinofibers Technology Co | City Development vs. Maxvision Technology Corp | City Development vs. Sportsoul Co Ltd | City Development vs. Holitech Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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