Correlation Between Long Yuan and Anhui Xinhua
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By analyzing existing cross correlation between Long Yuan Construction and Anhui Xinhua Media, you can compare the effects of market volatilities on Long Yuan and Anhui Xinhua 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 Anhui Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Anhui Xinhua.
Diversification Opportunities for Long Yuan and Anhui Xinhua
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Long and Anhui is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Anhui Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Xinhua Media 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 Anhui Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Xinhua Media has no effect on the direction of Long Yuan i.e., Long Yuan and Anhui Xinhua go up and down completely randomly.
Pair Corralation between Long Yuan and Anhui Xinhua
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 1.42 times more return on investment than Anhui Xinhua. However, Long Yuan is 1.42 times more volatile than Anhui Xinhua Media. It trades about -0.04 of its potential returns per unit of risk. Anhui Xinhua Media is currently generating about -0.24 per unit of risk. If you would invest 376.00 in Long Yuan Construction on October 30, 2024 and sell it today you would lose (10.00) from holding Long Yuan Construction or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Anhui Xinhua Media
Performance |
| Timeline |
| Long Yuan Construction |
| Anhui Xinhua Media |
Long Yuan and Anhui Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Anhui Xinhua
The main advantage of trading using opposite Long Yuan and Anhui Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Anhui Xinhua 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 Anhui Xinhua will offset losses from the drop in Anhui Xinhua's long position.| Long Yuan vs. COL Digital Publishing | Long Yuan vs. Shenzhen Zhongzhuang Construction | Long Yuan vs. XCMG Construction Machinery | Long Yuan vs. Zhangjiagang Freetrade Science |
| Anhui Xinhua vs. PetroChina Co Ltd | Anhui Xinhua vs. China Mobile Limited | Anhui Xinhua vs. CNOOC Limited | Anhui Xinhua vs. Ping An Insurance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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