Correlation Between Longjian Road and Hunan TV

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Longjian Road and Hunan TV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Longjian Road and Hunan TV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longjian Road Bridge and Hunan TV Broadcast, you can compare the effects of market volatilities on Longjian Road and Hunan TV 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 Hunan TV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Hunan TV.

Diversification Opportunities for Longjian Road and Hunan TV

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Longjian and Hunan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Hunan TV Broadcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan TV Broadcast 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 Hunan TV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan TV Broadcast has no effect on the direction of Longjian Road i.e., Longjian Road and Hunan TV go up and down completely randomly.

Pair Corralation between Longjian Road and Hunan TV

Assuming the 90 days trading horizon Longjian Road is expected to generate 3.13 times less return on investment than Hunan TV. But when comparing it to its historical volatility, Longjian Road Bridge is 1.11 times less risky than Hunan TV. It trades about 0.02 of its potential returns per unit of risk. Hunan TV Broadcast is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  514.00  in Hunan TV Broadcast on August 28, 2024 and sell it today you would earn a total of  270.00  from holding Hunan TV Broadcast or generate 52.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Longjian Road Bridge  vs.  Hunan TV Broadcast

 Performance 
       Timeline  
Longjian Road Bridge 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Longjian Road Bridge are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Longjian Road sustained solid returns over the last few months and may actually be approaching a breakup point.
Hunan TV Broadcast 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan TV Broadcast are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan TV sustained solid returns over the last few months and may actually be approaching a breakup point.

Longjian Road and Hunan TV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Longjian Road and Hunan TV

The main advantage of trading using opposite Longjian Road and Hunan TV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Hunan TV 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 Hunan TV will offset losses from the drop in Hunan TV'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
The idea behind Longjian Road Bridge and Hunan TV Broadcast 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.
Hunan TV vs. Agricultural Bank of
Hunan TV vs. Bus Online Co
Hunan TV vs. Shenwu Energy Saving
Hunan TV vs. Ningbo MedicalSystem Biotechnology
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY