Correlation Between Liaoning Chengda and Lonkey Industrial
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Lonkey Industrial Co, you can compare the effects of market volatilities on Liaoning Chengda and Lonkey Industrial 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 Liaoning Chengda with a short position of Lonkey Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Lonkey Industrial.
Diversification Opportunities for Liaoning Chengda and Lonkey Industrial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liaoning and Lonkey is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Lonkey Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonkey Industrial and Liaoning Chengda 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 Liaoning Chengda Biotechnology are associated (or correlated) with Lonkey Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonkey Industrial has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Lonkey Industrial go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Lonkey Industrial
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Lonkey Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 1.26 times less risky than Lonkey Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Lonkey Industrial Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Lonkey Industrial Co on September 3, 2024 and sell it today you would lose (18.00) from holding Lonkey Industrial Co or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Lonkey Industrial Co
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Lonkey Industrial |
Liaoning Chengda and Lonkey Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Lonkey Industrial
The main advantage of trading using opposite Liaoning Chengda and Lonkey Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Lonkey Industrial 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 Lonkey Industrial will offset losses from the drop in Lonkey Industrial's long position.| Liaoning Chengda vs. Chengdu Kanghua Biological | Liaoning Chengda vs. Beijing Wantai Biological | Liaoning Chengda vs. Suzhou Novoprotein Scientific | Liaoning Chengda vs. Aluminum Corp of |
| Lonkey Industrial vs. Chengdu Spaceon Electronics | Lonkey Industrial vs. Sinosteel Luonai Materials | Lonkey Industrial vs. JCHX Mining Management | Lonkey Industrial vs. King Strong New Material |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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