Correlation Between Longjian Road and Weichai Heavy
Specify exactly 2 symbols:
By analyzing existing cross correlation between Longjian Road Bridge and Weichai Heavy Machinery, you can compare the effects of market volatilities on Longjian Road and Weichai Heavy 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 Longjian Road with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Weichai Heavy.
Diversification Opportunities for Longjian Road and Weichai Heavy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longjian and Weichai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Longjian Road 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 Longjian Road Bridge are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Longjian Road i.e., Longjian Road and Weichai Heavy go up and down completely randomly.
Pair Corralation between Longjian Road and Weichai Heavy
Assuming the 90 days trading horizon Longjian Road is expected to generate 149.72 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Longjian Road Bridge is 2.95 times less risky than Weichai Heavy. It trades about 0.0 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Weichai Heavy Machinery on August 29, 2024 and sell it today you would earn a total of 131.00 from holding Weichai Heavy Machinery or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longjian Road Bridge vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Longjian Road Bridge |
| Weichai Heavy Machinery |
Longjian Road and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Weichai Heavy
The main advantage of trading using opposite Longjian Road and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Longjian Road vs. Guangzhou Jinyi Media | Longjian Road vs. Nexchip Semiconductor Corp | Longjian Road vs. Northern United Publishing | Longjian Road vs. Sportsoul Co Ltd |
| Weichai Heavy vs. China Asset Management | Weichai Heavy vs. Harvest Fund Management | Weichai Heavy vs. JCHX Mining Management | Weichai Heavy vs. AVIC Fund Management |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |