Correlation Between Longjian Road and Guangzhou Restaurants
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By analyzing existing cross correlation between Longjian Road Bridge and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Longjian Road and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Guangzhou Restaurants.
Diversification Opportunities for Longjian Road and Guangzhou Restaurants
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longjian and Guangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Longjian Road i.e., Longjian Road and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Longjian Road and Guangzhou Restaurants
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 0.98 times more return on investment than Guangzhou Restaurants. However, Longjian Road Bridge is 1.02 times less risky than Guangzhou Restaurants. It trades about 0.11 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about 0.02 per unit of risk. If you would invest 384.00 in Longjian Road Bridge on September 5, 2024 and sell it today you would earn a total of 17.00 from holding Longjian Road Bridge or generate 4.43% 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. Guangzhou Restaurants Group
Performance |
| Timeline |
| Longjian Road Bridge |
| Guangzhou Restaurants |
Longjian Road and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Guangzhou Restaurants
The main advantage of trading using opposite Longjian Road and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' 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 |
| Guangzhou Restaurants vs. Hengdian Entertainment Co | Guangzhou Restaurants vs. Longjian Road Bridge | Guangzhou Restaurants vs. Juneyao Airlines | Guangzhou Restaurants vs. Focus Media Information |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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