Correlation Between Xiamen Goldenhome and Lianhe Chemical
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By analyzing existing cross correlation between Xiamen Goldenhome Co and Lianhe Chemical Technology, you can compare the effects of market volatilities on Xiamen Goldenhome 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 Xiamen Goldenhome with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Goldenhome and Lianhe Chemical.
Diversification Opportunities for Xiamen Goldenhome and Lianhe Chemical
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xiamen and Lianhe is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Goldenhome Co 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 Xiamen Goldenhome 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 Xiamen Goldenhome Co 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 Xiamen Goldenhome i.e., Xiamen Goldenhome and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Xiamen Goldenhome and Lianhe Chemical
Assuming the 90 days trading horizon Xiamen Goldenhome Co is expected to generate 1.56 times more return on investment than Lianhe Chemical. However, Xiamen Goldenhome is 1.56 times more volatile than Lianhe Chemical Technology. It trades about 0.21 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.05 per unit of risk. If you would invest 2,009 in Xiamen Goldenhome Co on September 16, 2024 and sell it today you would earn a total of 279.00 from holding Xiamen Goldenhome Co or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Goldenhome Co vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Xiamen Goldenhome |
| Lianhe Chemical Tech |
Xiamen Goldenhome and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Goldenhome and Lianhe Chemical
The main advantage of trading using opposite Xiamen Goldenhome and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Goldenhome 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.| Xiamen Goldenhome vs. Lutian Machinery Co | Xiamen Goldenhome vs. China Longyuan Power | Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. Bank of China |
| Lianhe Chemical vs. Xiamen Goldenhome Co | Lianhe Chemical vs. Vohringer Home Technology | Lianhe Chemical vs. Inspur Software Co | Lianhe Chemical vs. Fujian Rongji Software |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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