Correlation Between Liaoning Port and Qingdao Port
Can any of the company-specific risk be diversified away by investing in both Liaoning Port and Qingdao Port at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Liaoning Port and Qingdao Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liaoning Port CoLtd and Qingdao Port International, you can compare the effects of market volatilities on Liaoning Port and Qingdao Port 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 Port with a short position of Qingdao Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Port and Qingdao Port.
Diversification Opportunities for Liaoning Port and Qingdao Port
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liaoning and Qingdao is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Port CoLtd and Qingdao Port International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Port Interna and Liaoning Port 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 Port CoLtd are associated (or correlated) with Qingdao Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Port Interna has no effect on the direction of Liaoning Port i.e., Liaoning Port and Qingdao Port go up and down completely randomly.
Pair Corralation between Liaoning Port and Qingdao Port
Assuming the 90 days horizon Liaoning Port is expected to generate 3.93 times less return on investment than Qingdao Port. But when comparing it to its historical volatility, Liaoning Port CoLtd is 1.28 times less risky than Qingdao Port. It trades about 0.04 of its potential returns per unit of risk. Qingdao Port International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Qingdao Port International on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Qingdao Port International or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Port CoLtd vs. Qingdao Port International
Performance |
| Timeline |
| Liaoning Port CoLtd |
| Qingdao Port Interna |
Liaoning Port and Qingdao Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Port and Qingdao Port
The main advantage of trading using opposite Liaoning Port and Qingdao Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Port position performs unexpectedly, Qingdao Port 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 Qingdao Port will offset losses from the drop in Qingdao Port's long position.| Liaoning Port vs. Nippon Yusen Kabushiki | Liaoning Port vs. Hapag Lloyd AG | Liaoning Port vs. Orient Overseas Limited | Liaoning Port vs. Mitsui OSK Lines |
| Qingdao Port vs. Nippon Yusen Kabushiki | Qingdao Port vs. Hapag Lloyd AG | Qingdao Port vs. Orient Overseas Limited | Qingdao Port vs. Mitsui OSK Lines |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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