Correlation Between Long Yuan and Harbin Air
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By analyzing existing cross correlation between Long Yuan Construction and Harbin Air Conditioning, you can compare the effects of market volatilities on Long Yuan and Harbin Air 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 Harbin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Harbin Air.
Diversification Opportunities for Long Yuan and Harbin Air
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Long and Harbin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Harbin Air Conditioning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbin Air Conditioning 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 Harbin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbin Air Conditioning has no effect on the direction of Long Yuan i.e., Long Yuan and Harbin Air go up and down completely randomly.
Pair Corralation between Long Yuan and Harbin Air
Assuming the 90 days trading horizon Long Yuan Construction is expected to under-perform the Harbin Air. But the stock apears to be less risky and, when comparing its historical volatility, Long Yuan Construction is 1.09 times less risky than Harbin Air. The stock trades about -0.01 of its potential returns per unit of risk. The Harbin Air Conditioning is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Harbin Air Conditioning on December 2, 2024 and sell it today you would lose (68.00) from holding Harbin Air Conditioning or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Harbin Air Conditioning
Performance |
| Timeline |
| Long Yuan Construction |
| Harbin Air Conditioning |
Long Yuan and Harbin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Harbin Air
The main advantage of trading using opposite Long Yuan and Harbin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Harbin Air 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 Harbin Air will offset losses from the drop in Harbin Air's long position.| Long Yuan vs. Shandong Polymer Biochemicals | Long Yuan vs. Hengli Industrial Development | Long Yuan vs. Soochow Suzhou Industrial | Long Yuan vs. Chengtun Mining Group |
| Harbin Air vs. Dazhong Transportation Group | Harbin Air vs. Shenzhen Urban Transport | Harbin Air vs. Fujian Longzhou Transportation | Harbin Air vs. Hainan Haiqi Transportation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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