Correlation Between Longjian Road and XinJiang GuoTong
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By analyzing existing cross correlation between Longjian Road Bridge and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Longjian Road and XinJiang GuoTong 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 XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and XinJiang GuoTong.
Diversification Opportunities for Longjian Road and XinJiang GuoTong
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longjian and XinJiang is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline 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 XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Longjian Road i.e., Longjian Road and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Longjian Road and XinJiang GuoTong
Assuming the 90 days trading horizon Longjian Road is expected to generate 6.17 times less return on investment than XinJiang GuoTong. But when comparing it to its historical volatility, Longjian Road Bridge is 1.45 times less risky than XinJiang GuoTong. It trades about 0.01 of its potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 848.00 in XinJiang GuoTong Pipeline on August 25, 2024 and sell it today you would earn a total of 50.00 from holding XinJiang GuoTong Pipeline or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longjian Road Bridge vs. XinJiang GuoTong Pipeline
Performance |
| Timeline |
| Longjian Road Bridge |
| XinJiang GuoTong Pipeline |
Longjian Road and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and XinJiang GuoTong
The main advantage of trading using opposite Longjian Road and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, XinJiang GuoTong 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 XinJiang GuoTong will offset losses from the drop in XinJiang GuoTong's long position.| Longjian Road vs. Ming Yang Smart | Longjian Road vs. 159681 | Longjian Road vs. 159005 | Longjian Road vs. Loctek Ergonomic Technology |
| XinJiang GuoTong vs. Yindu Kitchen Equipment | XinJiang GuoTong vs. GRINM Semiconductor Materials | XinJiang GuoTong vs. StarPower Semiconductor | XinJiang GuoTong vs. Shandong Polymer Biochemicals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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