Correlation Between Zhongtong Guomai and China Longyuan
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By analyzing existing cross correlation between Zhongtong Guomai Communication and China Longyuan Power, you can compare the effects of market volatilities on Zhongtong Guomai and China Longyuan 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 Zhongtong Guomai with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and China Longyuan.
Diversification Opportunities for Zhongtong Guomai and China Longyuan
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and China Longyuan go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and China Longyuan
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.34 times more return on investment than China Longyuan. However, Zhongtong Guomai is 1.34 times more volatile than China Longyuan Power. It trades about 0.19 of its potential returns per unit of risk. China Longyuan Power is currently generating about 0.1 per unit of risk. If you would invest 731.00 in Zhongtong Guomai Communication on September 4, 2024 and sell it today you would earn a total of 374.00 from holding Zhongtong Guomai Communication or generate 51.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. China Longyuan Power
Performance |
| Timeline |
| Zhongtong Guomai Com |
| China Longyuan Power |
Zhongtong Guomai and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and China Longyuan
The main advantage of trading using opposite Zhongtong Guomai and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Zhongtong Guomai vs. Wuhan Xianglong Power | Zhongtong Guomai vs. Yuanjie Semiconductor Technology | Zhongtong Guomai vs. Kuang Chi Technologies | Zhongtong Guomai vs. Yunnan Bowin Technology |
| China Longyuan vs. Nanjing OLO Home | China Longyuan vs. Guangzhou Haige Communications | China Longyuan vs. Zhongtong Guomai Communication | China Longyuan vs. Shandong Homey Aquatic |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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