Correlation Between Chengdu B and Longxing Chemical
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By analyzing existing cross correlation between Chengdu B ray Media and Longxing Chemical Stock, you can compare the effects of market volatilities on Chengdu B and Longxing Chemical 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 Chengdu B with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu B and Longxing Chemical.
Diversification Opportunities for Chengdu B and Longxing Chemical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chengdu and Longxing is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu B ray Media and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Chengdu B 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 Chengdu B ray Media are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Chengdu B i.e., Chengdu B and Longxing Chemical go up and down completely randomly.
Pair Corralation between Chengdu B and Longxing Chemical
Assuming the 90 days trading horizon Chengdu B ray Media is expected to under-perform the Longxing Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu B ray Media is 1.4 times less risky than Longxing Chemical. The stock trades about -0.19 of its potential returns per unit of risk. The Longxing Chemical Stock is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 537.00 in Longxing Chemical Stock on October 24, 2024 and sell it today you would earn a total of 28.00 from holding Longxing Chemical Stock or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu B ray Media vs. Longxing Chemical Stock
Performance |
| Timeline |
| Chengdu B ray |
| Longxing Chemical Stock |
Chengdu B and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu B and Longxing Chemical
The main advantage of trading using opposite Chengdu B and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu B position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Chengdu B vs. Longxing Chemical Stock | Chengdu B vs. Beijing Mainstreets Investment | Chengdu B vs. Shenzhen Centralcon Investment | Chengdu B vs. Jiangsu Yueda Investment |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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