Correlation Between Liaoning Chengda and Long Yuan
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Long Yuan Construction, you can compare the effects of market volatilities on Liaoning Chengda and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Long Yuan.
Diversification Opportunities for Liaoning Chengda and Long Yuan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liaoning and Long is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Long Yuan go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Long Yuan
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Long Yuan. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 2.28 times less risky than Long Yuan. The stock trades about -0.02 of its potential returns per unit of risk. The Long Yuan Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Long Yuan Construction on October 17, 2024 and sell it today you would earn a total of 29.00 from holding Long Yuan Construction or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Long Yuan Construction
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Long Yuan Construction |
Liaoning Chengda and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Long Yuan
The main advantage of trading using opposite Liaoning Chengda and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Liaoning Chengda vs. CIMC Vehicles Co | Liaoning Chengda vs. China Sports Industry | Liaoning Chengda vs. Tieling Newcity Investment | Liaoning Chengda vs. Hubei Geoway Investment |
| Long Yuan vs. Jinhe Biotechnology Co | Long Yuan vs. Hengkang Medical Group | Long Yuan vs. Maccura Biotechnology Co | Long Yuan vs. Liaoning Chengda Biotechnology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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