Correlation Between Dalian Thermal and Levima Advanced
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By analyzing existing cross correlation between Dalian Thermal Power and Levima Advanced Materials, you can compare the effects of market volatilities on Dalian Thermal and Levima Advanced 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 Levima Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Levima Advanced.
Diversification Opportunities for Dalian Thermal and Levima Advanced
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dalian and Levima is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Levima Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levima Advanced Materials 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 Levima Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levima Advanced Materials has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Levima Advanced go up and down completely randomly.
Pair Corralation between Dalian Thermal and Levima Advanced
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.72 times more return on investment than Levima Advanced. However, Dalian Thermal is 1.72 times more volatile than Levima Advanced Materials. It trades about -0.01 of its potential returns per unit of risk. Levima Advanced Materials is currently generating about -0.07 per unit of risk. If you would invest 811.00 in Dalian Thermal Power on September 1, 2024 and sell it today you would lose (21.00) from holding Dalian Thermal Power or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Levima Advanced Materials
Performance |
| Timeline |
| Dalian Thermal Power |
| Levima Advanced Materials |
Dalian Thermal and Levima Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Levima Advanced
The main advantage of trading using opposite Dalian Thermal and Levima Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Levima Advanced 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 Levima Advanced will offset losses from the drop in Levima Advanced's long position.| Dalian Thermal vs. Lutian Machinery Co | Dalian Thermal vs. China Longyuan Power | Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. Bank of China |
| Levima Advanced vs. Gome Telecom Equipment | Levima Advanced vs. Der International Home | Levima Advanced vs. Sunwave Communications Co | Levima Advanced vs. Fiberhome Telecommunication Technologies |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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