Correlation Between Fuzhou Rockchip and Shandong Longda
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By analyzing existing cross correlation between Fuzhou Rockchip Electronics and Shandong Longda Meat, you can compare the effects of market volatilities on Fuzhou Rockchip and Shandong Longda 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 Fuzhou Rockchip with a short position of Shandong Longda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuzhou Rockchip and Shandong Longda.
Diversification Opportunities for Fuzhou Rockchip and Shandong Longda
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuzhou and Shandong is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fuzhou Rockchip Electronics and Shandong Longda Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longda Meat and Fuzhou Rockchip 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 Fuzhou Rockchip Electronics are associated (or correlated) with Shandong Longda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longda Meat has no effect on the direction of Fuzhou Rockchip i.e., Fuzhou Rockchip and Shandong Longda go up and down completely randomly.
Pair Corralation between Fuzhou Rockchip and Shandong Longda
Assuming the 90 days trading horizon Fuzhou Rockchip Electronics is expected to generate 2.98 times more return on investment than Shandong Longda. However, Fuzhou Rockchip is 2.98 times more volatile than Shandong Longda Meat. It trades about 0.33 of its potential returns per unit of risk. Shandong Longda Meat is currently generating about -0.57 per unit of risk. If you would invest 11,595 in Fuzhou Rockchip Electronics on October 30, 2024 and sell it today you would earn a total of 4,855 from holding Fuzhou Rockchip Electronics or generate 41.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuzhou Rockchip Electronics vs. Shandong Longda Meat
Performance |
| Timeline |
| Fuzhou Rockchip Elec |
| Shandong Longda Meat |
Fuzhou Rockchip and Shandong Longda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuzhou Rockchip and Shandong Longda
The main advantage of trading using opposite Fuzhou Rockchip and Shandong Longda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuzhou Rockchip position performs unexpectedly, Shandong Longda 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 Shandong Longda will offset losses from the drop in Shandong Longda's long position.| Fuzhou Rockchip vs. Guocheng Mining Co | Fuzhou Rockchip vs. Guangdong Jingyi Metal | Fuzhou Rockchip vs. Uroica Mining Safety | Fuzhou Rockchip vs. Hainan Mining Co |
| Shandong Longda vs. Guangzhou Jinyi Media | Shandong Longda vs. Chengdu Spaceon Electronics | Shandong Longda vs. Duzhe Publishing Media | Shandong Longda vs. China Publishing Media |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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