Correlation Between Yantai North and China Longyuan
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By analyzing existing cross correlation between Yantai North Andre and China Longyuan Power, you can compare the effects of market volatilities on Yantai North 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 Yantai North with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yantai North and China Longyuan.
Diversification Opportunities for Yantai North and China Longyuan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yantai and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yantai North Andre 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 Yantai North 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 Yantai North Andre 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 Yantai North i.e., Yantai North and China Longyuan go up and down completely randomly.
Pair Corralation between Yantai North and China Longyuan
Assuming the 90 days trading horizon Yantai North Andre is expected to under-perform the China Longyuan. In addition to that, Yantai North is 1.16 times more volatile than China Longyuan Power. It trades about -0.05 of its total potential returns per unit of risk. China Longyuan Power is currently generating about -0.01 per unit of volatility. If you would invest 1,825 in China Longyuan Power on August 25, 2024 and sell it today you would lose (102.00) from holding China Longyuan Power or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yantai North Andre vs. China Longyuan Power
Performance |
| Timeline |
| Yantai North Andre |
| China Longyuan Power |
Yantai North and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yantai North and China Longyuan
The main advantage of trading using opposite Yantai North and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yantai North 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.| Yantai North vs. Wuhan Yangtze Communication | Yantai North vs. Eastern Communications Co | Yantai North vs. Keda Clean Energy | Yantai North vs. Fiberhome Telecommunication Technologies |
| China Longyuan vs. Youyou Foods Co | China Longyuan vs. Hang Xiao Steel | China Longyuan vs. City Development Environment | China Longyuan vs. Air China Ltd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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