Correlation Between Longjian Road and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Longjian Road Bridge and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Longjian Road and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Shenzhen Zhongzhuang.
Diversification Opportunities for Longjian Road and Shenzhen Zhongzhuang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Longjian and Shenzhen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Longjian Road i.e., Longjian Road and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Longjian Road and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Longjian Road is expected to generate 8.58 times less return on investment than Shenzhen Zhongzhuang. But when comparing it to its historical volatility, Longjian Road Bridge is 1.73 times less risky than Shenzhen Zhongzhuang. It trades about 0.11 of its potential returns per unit of risk. Shenzhen Zhongzhuang Construction is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Shenzhen Zhongzhuang Construction on September 5, 2024 and sell it today you would earn a total of 129.00 from holding Shenzhen Zhongzhuang Construction or generate 47.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longjian Road Bridge vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Longjian Road Bridge |
| Shenzhen Zhongzhuang |
Longjian Road and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Shenzhen Zhongzhuang
The main advantage of trading using opposite Longjian Road and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Longjian Road vs. Zhejiang Daily Media | Longjian Road vs. CSSC Offshore Marine | Longjian Road vs. XinJiang GuoTong Pipeline | Longjian Road vs. Guangdong Jinma Entertainment |
| Shenzhen Zhongzhuang vs. Central Plains Environment | Shenzhen Zhongzhuang vs. Bengang Steel Plates | Shenzhen Zhongzhuang vs. Ningbo Thermal Power | Shenzhen Zhongzhuang vs. Beijing SPC Environment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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