Correlation Between Allied Machinery and Fujian Longzhou
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By analyzing existing cross correlation between Allied Machinery Co and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Allied Machinery 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 Allied Machinery with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Fujian Longzhou.
Diversification Opportunities for Allied Machinery and Fujian Longzhou
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allied and Fujian is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co 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 Allied Machinery 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 Allied Machinery Co 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 Allied Machinery i.e., Allied Machinery and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Allied Machinery and Fujian Longzhou
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 1.58 times more return on investment than Fujian Longzhou. However, Allied Machinery is 1.58 times more volatile than Fujian Longzhou Transportation. It trades about 0.17 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.21 per unit of risk. If you would invest 1,586 in Allied Machinery Co on October 20, 2024 and sell it today you would earn a total of 296.00 from holding Allied Machinery Co or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Allied Machinery |
| Fujian Longzhou Tran |
Allied Machinery and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Fujian Longzhou
The main advantage of trading using opposite Allied Machinery and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery 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.| Allied Machinery vs. Sanbo Hospital Management | Allied Machinery vs. Shanghai V Test Semiconductor | Allied Machinery vs. Innovative Medical Management | Allied Machinery vs. XinJiang GuoTong Pipeline |
| Fujian Longzhou vs. China State Construction | Fujian Longzhou vs. Poly Real Estate | Fujian Longzhou vs. China Vanke Co | Fujian Longzhou vs. China Merchants Shekou |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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