Correlation Between Northern United and Longjian Road
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By analyzing existing cross correlation between Northern United Publishing and Longjian Road Bridge, you can compare the effects of market volatilities on Northern United and Longjian Road 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 Northern United with a short position of Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Longjian Road.
Diversification Opportunities for Northern United and Longjian Road
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northern and Longjian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge and Northern United 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 Northern United Publishing are associated (or correlated) with Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of Northern United i.e., Northern United and Longjian Road go up and down completely randomly.
Pair Corralation between Northern United and Longjian Road
Assuming the 90 days trading horizon Northern United Publishing is expected to generate 1.16 times more return on investment than Longjian Road. However, Northern United is 1.16 times more volatile than Longjian Road Bridge. It trades about 0.01 of its potential returns per unit of risk. Longjian Road Bridge is currently generating about -0.01 per unit of risk. If you would invest 757.00 in Northern United Publishing on August 31, 2024 and sell it today you would lose (62.00) from holding Northern United Publishing or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Northern United Publishing vs. Longjian Road Bridge
Performance |
| Timeline |
| Northern United Publ |
| Longjian Road Bridge |
Northern United and Longjian Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern United and Longjian Road
The main advantage of trading using opposite Northern United and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.| Northern United vs. BYD Co Ltd | Northern United vs. Agricultural Bank of | Northern United vs. Industrial and Commercial | Northern United vs. China State Construction |
| Longjian Road vs. Cultural Investment Holdings | Longjian Road vs. Gome Telecom Equipment | Longjian Road vs. Bus Online Co | Longjian Road vs. Holitech Technology Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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