Correlation Between Railway Signal and Lianhe Chemical
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By analyzing existing cross correlation between Railway Signal Communication and Lianhe Chemical Technology, you can compare the effects of market volatilities on Railway Signal and Lianhe Chemical 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 Railway Signal with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Railway Signal and Lianhe Chemical.
Diversification Opportunities for Railway Signal and Lianhe Chemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Railway and Lianhe is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Railway Signal Communication and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and Railway Signal 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 Railway Signal Communication are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Railway Signal i.e., Railway Signal and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Railway Signal and Lianhe Chemical
Assuming the 90 days trading horizon Railway Signal is expected to generate 1.14 times less return on investment than Lianhe Chemical. But when comparing it to its historical volatility, Railway Signal Communication is 1.01 times less risky than Lianhe Chemical. It trades about 0.04 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 596.00 in Lianhe Chemical Technology on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Lianhe Chemical Technology or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Railway Signal Communication vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Railway Signal Commu |
| Lianhe Chemical Tech |
Railway Signal and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Railway Signal and Lianhe Chemical
The main advantage of trading using opposite Railway Signal and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Railway Signal position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Railway Signal vs. Nanjing Putian Telecommunications | Railway Signal vs. Shenzhen Hifuture Electric | Railway Signal vs. Tianjin Realty Development | Railway Signal vs. Shenyang Huitian Thermal |
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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