Correlation Between Liaoning Chengda and Foxconn Industrial
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Foxconn Industrial Internet, you can compare the effects of market volatilities on Liaoning Chengda and Foxconn 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 Foxconn Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Foxconn Industrial.
Diversification Opportunities for Liaoning Chengda and Foxconn Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liaoning and Foxconn is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Foxconn Industrial Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foxconn 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 Foxconn Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foxconn Industrial has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Foxconn Industrial go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Foxconn Industrial
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.67 times more return on investment than Foxconn Industrial. However, Liaoning Chengda Biotechnology is 1.5 times less risky than Foxconn Industrial. It trades about -0.07 of its potential returns per unit of risk. Foxconn Industrial Internet is currently generating about -0.33 per unit of risk. If you would invest 2,875 in Liaoning Chengda Biotechnology on September 14, 2024 and sell it today you would lose (71.00) from holding Liaoning Chengda Biotechnology or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Foxconn Industrial Internet
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Foxconn Industrial |
Liaoning Chengda and Foxconn Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Foxconn Industrial
The main advantage of trading using opposite Liaoning Chengda and Foxconn Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Foxconn 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 Foxconn Industrial will offset losses from the drop in Foxconn Industrial's long position.| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China | Liaoning Chengda vs. Agricultural Bank of |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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