Correlation Between China Longyuan and Guangdong Jinma
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By analyzing existing cross correlation between China Longyuan Power and Guangdong Jinma Entertainment, you can compare the effects of market volatilities on China Longyuan and Guangdong Jinma 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 China Longyuan with a short position of Guangdong Jinma. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Guangdong Jinma.
Diversification Opportunities for China Longyuan and Guangdong Jinma
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Guangdong is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Guangdong Jinma Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jinma Ente and China Longyuan 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 China Longyuan Power are associated (or correlated) with Guangdong Jinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jinma Ente has no effect on the direction of China Longyuan i.e., China Longyuan and Guangdong Jinma go up and down completely randomly.
Pair Corralation between China Longyuan and Guangdong Jinma
Assuming the 90 days trading horizon China Longyuan Power is expected to generate 0.69 times more return on investment than Guangdong Jinma. However, China Longyuan Power is 1.45 times less risky than Guangdong Jinma. It trades about -0.34 of its potential returns per unit of risk. Guangdong Jinma Entertainment is currently generating about -0.38 per unit of risk. If you would invest 1,686 in China Longyuan Power on October 6, 2024 and sell it today you would lose (205.00) from holding China Longyuan Power or give up 12.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Longyuan Power vs. Guangdong Jinma Entertainment
Performance |
Timeline |
China Longyuan Power |
Guangdong Jinma Ente |
China Longyuan and Guangdong Jinma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Longyuan and Guangdong Jinma
The main advantage of trading using opposite China Longyuan and Guangdong Jinma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Guangdong Jinma 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 Guangdong Jinma will offset losses from the drop in Guangdong Jinma's long position.China Longyuan vs. Tsingtao Brewery Co | ||
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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