Correlation Between Dalian Thermal and Shandong Longquan
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By analyzing existing cross correlation between Dalian Thermal Power and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Dalian Thermal 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 Dalian Thermal with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Shandong Longquan.
Diversification Opportunities for Dalian Thermal and Shandong Longquan
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dalian and Shandong is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Dalian Thermal 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 Dalian Thermal Power 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 Dalian Thermal i.e., Dalian Thermal and Shandong Longquan go up and down completely randomly.
Pair Corralation between Dalian Thermal and Shandong Longquan
Assuming the 90 days trading horizon Dalian Thermal Power is expected to under-perform the Shandong Longquan. In addition to that, Dalian Thermal is 1.77 times more volatile than Shandong Longquan Pipeline. It trades about -0.26 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.12 per unit of volatility. If you would invest 463.00 in Shandong Longquan Pipeline on October 28, 2024 and sell it today you would earn a total of 17.00 from holding Shandong Longquan Pipeline or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Dalian Thermal Power |
| Shandong Longquan |
Dalian Thermal and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Shandong Longquan
The main advantage of trading using opposite Dalian Thermal and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal 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.| Dalian Thermal vs. Central Plains Environment | Dalian Thermal vs. Quectel Wireless Solutions | Dalian Thermal vs. Baoshan Iron Steel | Dalian Thermal vs. CICC Fund Management |
| Shandong Longquan vs. Quectel Wireless Solutions | Shandong Longquan vs. GuoChuang Software Co | Shandong Longquan vs. Beijing Baolande Software | Shandong Longquan vs. Glodon Software 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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