Correlation Between China Publishing and Lianhe Chemical
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By analyzing existing cross correlation between China Publishing Media and Lianhe Chemical Technology, you can compare the effects of market volatilities on China Publishing and Lianhe 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 China Publishing with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Publishing and Lianhe Chemical.
Diversification Opportunities for China Publishing and Lianhe Chemical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Lianhe is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Publishing Media and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and China Publishing 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 China Publishing Media are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of China Publishing i.e., China Publishing and Lianhe Chemical go up and down completely randomly.
Pair Corralation between China Publishing and Lianhe Chemical
Assuming the 90 days trading horizon China Publishing Media is expected to generate 1.54 times more return on investment than Lianhe Chemical. However, China Publishing is 1.54 times more volatile than Lianhe Chemical Technology. It trades about 0.03 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about -0.08 per unit of risk. If you would invest 517.00 in China Publishing Media on November 2, 2024 and sell it today you would earn a total of 179.00 from holding China Publishing Media or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Publishing Media vs. Lianhe Chemical Technology
Performance |
| Timeline |
| China Publishing Media |
| Lianhe Chemical Tech |
China Publishing and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Publishing and Lianhe Chemical
The main advantage of trading using opposite China Publishing and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Publishing position performs unexpectedly, Lianhe 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| China Publishing vs. Jiamei Food Packaging | China Publishing vs. New Hope Dairy | China Publishing vs. Beijing Yanjing Brewery | China Publishing vs. Yankershop Food Co |
| Lianhe Chemical vs. Zijin Mining Group | Lianhe Chemical vs. Wanhua Chemical Group | Lianhe Chemical vs. Baoshan Iron Steel | Lianhe Chemical vs. Shandong Gold Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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