Correlation Between Longjian Road and Hubeiyichang Transportation
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By analyzing existing cross correlation between Longjian Road Bridge and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Longjian Road and Hubeiyichang Transportation 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 Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Hubeiyichang Transportation.
Diversification Opportunities for Longjian Road and Hubeiyichang Transportation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longjian and Hubeiyichang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation 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 Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Longjian Road i.e., Longjian Road and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Longjian Road and Hubeiyichang Transportation
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 2.63 times more return on investment than Hubeiyichang Transportation. However, Longjian Road is 2.63 times more volatile than Hubeiyichang Transportation Group. It trades about 0.33 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.36 per unit of risk. If you would invest 384.00 in Longjian Road Bridge on September 15, 2024 and sell it today you would earn a total of 94.00 from holding Longjian Road Bridge or generate 24.48% 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. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Longjian Road Bridge |
| Hubeiyichang Transportation |
Longjian Road and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Hubeiyichang Transportation
The main advantage of trading using opposite Longjian Road and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| Longjian Road vs. Ming Yang Smart | Longjian Road vs. 159681 | Longjian Road vs. 159005 | Longjian Road vs. Loctek Ergonomic Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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