Correlation Between Changjiang Publishing and Leyard Optoelectronic
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By analyzing existing cross correlation between Changjiang Publishing Media and Leyard Optoelectronic, you can compare the effects of market volatilities on Changjiang Publishing and Leyard Optoelectronic 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 Changjiang Publishing with a short position of Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Leyard Optoelectronic.
Diversification Opportunities for Changjiang Publishing and Leyard Optoelectronic
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Changjiang and Leyard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between Changjiang Publishing and Leyard Optoelectronic
Assuming the 90 days trading horizon Changjiang Publishing Media is expected to generate 0.86 times more return on investment than Leyard Optoelectronic. However, Changjiang Publishing Media is 1.16 times less risky than Leyard Optoelectronic. It trades about 0.05 of its potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.01 per unit of risk. If you would invest 573.00 in Changjiang Publishing Media on November 6, 2024 and sell it today you would earn a total of 331.00 from holding Changjiang Publishing Media or generate 57.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Publishing Media vs. Leyard Optoelectronic
Performance |
| Timeline |
| Changjiang Publishing |
| Leyard Optoelectronic |
Changjiang Publishing and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Publishing and Leyard Optoelectronic
The main advantage of trading using opposite Changjiang Publishing and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic's long position.The idea behind Changjiang Publishing Media and Leyard Optoelectronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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