Correlation Between Longjian Road and Long Yuan
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By analyzing existing cross correlation between Longjian Road Bridge and Long Yuan Construction, you can compare the effects of market volatilities on Longjian Road and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Long Yuan.
Diversification Opportunities for Longjian Road and Long Yuan
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longjian and Long is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Longjian Road i.e., Longjian Road and Long Yuan go up and down completely randomly.
Pair Corralation between Longjian Road and Long Yuan
Assuming the 90 days trading horizon Longjian Road Bridge is expected to under-perform the Long Yuan. In addition to that, Longjian Road is 1.24 times more volatile than Long Yuan Construction. It trades about -0.03 of its total potential returns per unit of risk. Long Yuan Construction is currently generating about -0.03 per unit of volatility. If you would invest 383.00 in Long Yuan Construction on October 30, 2024 and sell it today you would lose (17.00) from holding Long Yuan Construction or give up 4.44% 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. Long Yuan Construction
Performance |
| Timeline |
| Longjian Road Bridge |
| Long Yuan Construction |
Longjian Road and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Long Yuan
The main advantage of trading using opposite Longjian Road and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Longjian Road vs. Guosheng Financial Holding | Longjian Road vs. Jiangsu Financial Leasing | Longjian Road vs. Caihong Display Devices | Longjian Road vs. China Greatwall Computer |
| Long Yuan vs. COL Digital Publishing | Long Yuan vs. Shenzhen Zhongzhuang Construction | Long Yuan vs. XCMG Construction Machinery | Long Yuan vs. Zhangjiagang Freetrade Science |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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