Correlation Between Linewell Software and Changchun
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By analyzing existing cross correlation between Linewell Software Co and Changchun UP Optotech, you can compare the effects of market volatilities on Linewell Software and Changchun 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 Linewell Software with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linewell Software and Changchun.
Diversification Opportunities for Linewell Software and Changchun
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Linewell and Changchun is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Linewell Software Co and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech and Linewell Software 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 Linewell Software Co are associated (or correlated) with Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Linewell Software i.e., Linewell Software and Changchun go up and down completely randomly.
Pair Corralation between Linewell Software and Changchun
Assuming the 90 days trading horizon Linewell Software is expected to generate 10.3 times less return on investment than Changchun. But when comparing it to its historical volatility, Linewell Software Co is 1.27 times less risky than Changchun. It trades about 0.01 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,760 in Changchun UP Optotech on August 28, 2024 and sell it today you would earn a total of 366.00 from holding Changchun UP Optotech or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linewell Software Co vs. Changchun UP Optotech
Performance |
| Timeline |
| Linewell Software |
| Changchun UP Optotech |
Linewell Software and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linewell Software and Changchun
The main advantage of trading using opposite Linewell Software and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linewell Software position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Linewell Software vs. Kunshan Guoli Electronic | Linewell Software vs. Bomin Electronics Co | Linewell Software vs. Xiangyang Automobile Bearing | Linewell Software vs. Changchun Faway Automobile |
| Changchun vs. Zhengzhou Qianweiyangchu Food | Changchun vs. Shenzhen Centralcon Investment | Changchun vs. New Hope Dairy | Changchun vs. Nuode Investment Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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