Correlation Between Fuda Alloy and Shandong Longquan
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By analyzing existing cross correlation between Fuda Alloy Materials and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Fuda Alloy and Shandong Longquan 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 Fuda Alloy with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuda Alloy and Shandong Longquan.
Diversification Opportunities for Fuda Alloy and Shandong Longquan
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fuda and Shandong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fuda Alloy Materials and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Fuda Alloy 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 Fuda Alloy Materials are associated (or correlated) with Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Fuda Alloy i.e., Fuda Alloy and Shandong Longquan go up and down completely randomly.
Pair Corralation between Fuda Alloy and Shandong Longquan
Assuming the 90 days trading horizon Fuda Alloy Materials is expected to under-perform the Shandong Longquan. But the stock apears to be less risky and, when comparing its historical volatility, Fuda Alloy Materials is 1.01 times less risky than Shandong Longquan. The stock trades about 0.0 of its potential returns per unit of risk. The Shandong Longquan Pipeline is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Shandong Longquan Pipeline on September 4, 2024 and sell it today you would lose (37.00) from holding Shandong Longquan Pipeline or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuda Alloy Materials vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Fuda Alloy Materials |
| Shandong Longquan |
Fuda Alloy and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuda Alloy and Shandong Longquan
The main advantage of trading using opposite Fuda Alloy and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuda Alloy position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Fuda Alloy vs. Biwin Storage Technology | Fuda Alloy vs. PetroChina Co Ltd | Fuda Alloy vs. Industrial and Commercial | Fuda Alloy vs. China Construction Bank |
| Shandong Longquan vs. Quectel Wireless Solutions | Shandong Longquan vs. Fuda Alloy Materials | Shandong Longquan vs. Yingde Greatchem Chemicals | Shandong Longquan vs. Shandong Huifa Foodstuff |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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