Correlation Between Liaoning Chengda and Fujian Longzhou
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Liaoning Chengda 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 Liaoning Chengda with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Fujian Longzhou.
Diversification Opportunities for Liaoning Chengda and Fujian Longzhou
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Fujian is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology 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 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 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 Liaoning Chengda i.e., Liaoning Chengda and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Fujian Longzhou
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.23 times more return on investment than Fujian Longzhou. However, Liaoning Chengda Biotechnology is 4.43 times less risky than Fujian Longzhou. It trades about -0.08 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.04 per unit of risk. If you would invest 2,696 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (55.00) from holding Liaoning Chengda Biotechnology or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Fujian Longzhou Tran |
Liaoning Chengda and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Fujian Longzhou
The main advantage of trading using opposite Liaoning Chengda and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda 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.| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. Agricultural Bank of | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China |
| Fujian Longzhou vs. Chengdu Kanghua Biological | Fujian Longzhou vs. Beijing Wantai Biological | Fujian Longzhou vs. Suzhou Novoprotein Scientific | Fujian Longzhou vs. Aluminum Corp of |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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