Correlation Between Shanghai Rongtai and Fujian Longzhou
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By analyzing existing cross correlation between Shanghai Rongtai Health and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Shanghai Rongtai and Fujian Longzhou 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 Shanghai Rongtai with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Fujian Longzhou.
Diversification Opportunities for Shanghai Rongtai and Fujian Longzhou
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Fujian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Shanghai Rongtai 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 Shanghai Rongtai Health are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Fujian Longzhou
Assuming the 90 days trading horizon Shanghai Rongtai is expected to generate 3.38 times less return on investment than Fujian Longzhou. But when comparing it to its historical volatility, Shanghai Rongtai Health is 2.62 times less risky than Fujian Longzhou. It trades about 0.26 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 427.00 in Fujian Longzhou Transportation on September 5, 2024 and sell it today you would earn a total of 164.00 from holding Fujian Longzhou Transportation or generate 38.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Fujian Longzhou Tran |
Shanghai Rongtai and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Fujian Longzhou
The main advantage of trading using opposite Shanghai Rongtai and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Shanghai Rongtai vs. Fiberhome Telecommunication Technologies | Shanghai Rongtai vs. Focus Media Information | Shanghai Rongtai vs. Wintao Communications Co | Shanghai Rongtai vs. Allwin Telecommunication Co |
| Fujian Longzhou vs. Yunnan Jianzhijia Health Chain | Fujian Longzhou vs. Lotus Health Group | Fujian Longzhou vs. Everjoy Health Group | Fujian Longzhou vs. Shanghai Rongtai Health |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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