Correlation Between Longjian Road and Shanghai Action
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By analyzing existing cross correlation between Longjian Road Bridge and Shanghai Action Education, you can compare the effects of market volatilities on Longjian Road and Shanghai Action 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 Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Shanghai Action.
Diversification Opportunities for Longjian Road and Shanghai Action
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Longjian and Shanghai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education 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 Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Longjian Road i.e., Longjian Road and Shanghai Action go up and down completely randomly.
Pair Corralation between Longjian Road and Shanghai Action
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 1.04 times more return on investment than Shanghai Action. However, Longjian Road is 1.04 times more volatile than Shanghai Action Education. It trades about 0.16 of its potential returns per unit of risk. Shanghai Action Education is currently generating about -0.22 per unit of risk. If you would invest 358.00 in Longjian Road Bridge on August 24, 2024 and sell it today you would earn a total of 25.00 from holding Longjian Road Bridge or generate 6.98% 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. Shanghai Action Education
Performance |
| Timeline |
| Longjian Road Bridge |
| Shanghai Action Education |
Longjian Road and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longjian Road and Shanghai Action
The main advantage of trading using opposite Longjian Road and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| Longjian Road vs. Chengdu Kanghua Biological | Longjian Road vs. Beijing Wantai Biological | Longjian Road vs. Suzhou Novoprotein Scientific | Longjian Road vs. Aluminum Corp of |
| Shanghai Action vs. Shenzhen SDG Information | Shanghai Action vs. Fujian Oriental Silver | Shanghai Action vs. Uroica Mining Safety | Shanghai Action vs. YLZ Information Tech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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