Correlation Between Longjian Road and Panda Dairy
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By analyzing existing cross correlation between Longjian Road Bridge and Panda Dairy Corp, you can compare the effects of market volatilities on Longjian Road and Panda Dairy 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 Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Panda Dairy.
Diversification Opportunities for Longjian Road and Panda Dairy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longjian and Panda is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp 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 Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Longjian Road i.e., Longjian Road and Panda Dairy go up and down completely randomly.
Pair Corralation between Longjian Road and Panda Dairy
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 0.71 times more return on investment than Panda Dairy. However, Longjian Road Bridge is 1.41 times less risky than Panda Dairy. It trades about -0.43 of its potential returns per unit of risk. Panda Dairy Corp is currently generating about -0.41 per unit of risk. If you would invest 478.00 in Longjian Road Bridge on October 14, 2024 and sell it today you would lose (124.00) from holding Longjian Road Bridge or give up 25.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longjian Road Bridge vs. Panda Dairy Corp
Performance |
| Timeline |
| Longjian Road Bridge |
| Panda Dairy Corp |
Longjian Road and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Panda Dairy
The main advantage of trading using opposite Longjian Road and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy's long position.| Longjian Road vs. Yunnan Jianzhijia Health Chain | Longjian Road vs. Hangzhou Minsheng Healthcare | Longjian Road vs. Heren Health Co | Longjian Road vs. Anhui Huaren Health |
| Panda Dairy vs. Keeson Technology Corp | Panda Dairy vs. Tianjin Ruixin Technology | Panda Dairy vs. Longjian Road Bridge | Panda Dairy vs. Heilongjiang Transport Development |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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