Correlation Between Liaoning Dingjide and Chongqing Landai
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Chongqing Landai Powertrain, you can compare the effects of market volatilities on Liaoning Dingjide and Chongqing Landai 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 Liaoning Dingjide with a short position of Chongqing Landai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Chongqing Landai.
Diversification Opportunities for Liaoning Dingjide and Chongqing Landai
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liaoning and Chongqing is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Chongqing Landai Powertrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Landai Pow and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Chongqing Landai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Landai Pow has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Chongqing Landai go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Chongqing Landai
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to under-perform the Chongqing Landai. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Dingjide Petrochemical is 1.28 times less risky than Chongqing Landai. The stock trades about -0.09 of its potential returns per unit of risk. The Chongqing Landai Powertrain is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Chongqing Landai Powertrain on October 25, 2024 and sell it today you would earn a total of 98.00 from holding Chongqing Landai Powertrain or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Chongqing Landai Powertrain
Performance |
| Timeline |
| Liaoning Dingjide |
| Chongqing Landai Pow |
Liaoning Dingjide and Chongqing Landai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Chongqing Landai
The main advantage of trading using opposite Liaoning Dingjide and Chongqing Landai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Chongqing Landai 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 Chongqing Landai will offset losses from the drop in Chongqing Landai's long position.| Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Wanhua Chemical Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Rongsheng Petrochemical Co |
| Chongqing Landai vs. CICC Fund Management | Chongqing Landai vs. China Asset Management | Chongqing Landai vs. Leyard Optoelectronic | Chongqing Landai vs. Huaxia Fund Management |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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