Correlation Between Long Yuan and Shandong Longquan
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By analyzing existing cross correlation between Long Yuan Construction and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Long Yuan and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Shandong Longquan.
Diversification Opportunities for Long Yuan and Shandong Longquan
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Long and Shandong is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Long Yuan i.e., Long Yuan and Shandong Longquan go up and down completely randomly.
Pair Corralation between Long Yuan and Shandong Longquan
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 1.23 times more return on investment than Shandong Longquan. However, Long Yuan is 1.23 times more volatile than Shandong Longquan Pipeline. It trades about 0.12 of its potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.08 per unit of risk. If you would invest 250.00 in Long Yuan Construction on August 31, 2024 and sell it today you would earn a total of 133.00 from holding Long Yuan Construction or generate 53.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Long Yuan Construction |
| Shandong Longquan |
Long Yuan and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Shandong Longquan
The main advantage of trading using opposite Long Yuan and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Long Yuan vs. Cultural Investment Holdings | Long Yuan vs. Gome Telecom Equipment | Long Yuan vs. Bus Online Co | Long Yuan vs. Holitech Technology Co |
| Shandong Longquan vs. Chison Medical Technologies | Shandong Longquan vs. Miracll Chemicals Co | Shandong Longquan vs. Dhc Software Co | Shandong Longquan vs. Guangzhou Boji Medical |
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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