Correlation Between Long Yuan and Jinlong Machinery
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By analyzing existing cross correlation between Long Yuan Construction and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Long Yuan and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Jinlong Machinery.
Diversification Opportunities for Long Yuan and Jinlong Machinery
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Long and Jinlong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Long Yuan i.e., Long Yuan and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Long Yuan and Jinlong Machinery
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 0.71 times more return on investment than Jinlong Machinery. However, Long Yuan Construction is 1.41 times less risky than Jinlong Machinery. It trades about -0.43 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.41 per unit of risk. If you would invest 423.00 in Long Yuan Construction on October 14, 2024 and sell it today you would lose (86.00) from holding Long Yuan Construction or give up 20.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| Long Yuan Construction |
| Jinlong Machinery |
Long Yuan and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Jinlong Machinery
The main advantage of trading using opposite Long Yuan and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Long Yuan vs. Easyhome New Retail | Long Yuan vs. Gansu Huangtai Wine marketing | Long Yuan vs. China World Trade | Long Yuan vs. Shaanxi Construction Machinery |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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