Correlation Between Longjian Road and Yingde Greatchem
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By analyzing existing cross correlation between Longjian Road Bridge and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Longjian Road and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Yingde Greatchem.
Diversification Opportunities for Longjian Road and Yingde Greatchem
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longjian and Yingde is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Longjian Road i.e., Longjian Road and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Longjian Road and Yingde Greatchem
Assuming the 90 days trading horizon Longjian Road Bridge is expected to under-perform the Yingde Greatchem. In addition to that, Longjian Road is 1.18 times more volatile than Yingde Greatchem Chemicals. It trades about -0.51 of its total potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about -0.16 per unit of volatility. If you would invest 2,614 in Yingde Greatchem Chemicals on October 16, 2024 and sell it today you would lose (226.00) from holding Yingde Greatchem Chemicals or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longjian Road Bridge vs. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Longjian Road Bridge |
| Yingde Greatchem Che |
Longjian Road and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Yingde Greatchem
The main advantage of trading using opposite Longjian Road and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem's long position.| Longjian Road vs. Medprin Regenerative Medical | Longjian Road vs. Winner Medical Co | Longjian Road vs. Chison Medical Technologies | Longjian Road vs. Giantec Semiconductor Corp |
| Yingde Greatchem vs. Hubeiyichang Transportation Group | Yingde Greatchem vs. Jiangsu Broadcasting Cable | Yingde Greatchem vs. Air China Ltd | Yingde Greatchem vs. Fujian Longzhou Transportation |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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