Correlation Between Sichuan Fulin and Dongguan Tarry
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Sichuan Fulin and Dongguan Tarry 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 Sichuan Fulin with a short position of Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Dongguan Tarry.
Diversification Opportunities for Sichuan Fulin and Dongguan Tarry
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Dongguan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Dongguan Tarry
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 1.24 times more return on investment than Dongguan Tarry. However, Sichuan Fulin is 1.24 times more volatile than Dongguan Tarry Electronics. It trades about 0.44 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.06 per unit of risk. If you would invest 744.00 in Sichuan Fulin Transportation on November 29, 2024 and sell it today you would earn a total of 157.00 from holding Sichuan Fulin Transportation or generate 21.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Fulin Transportation vs. Dongguan Tarry Electronics
Performance |
Timeline |
Sichuan Fulin Transp |
Dongguan Tarry Elect |
Sichuan Fulin and Dongguan Tarry Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Fulin and Dongguan Tarry
The main advantage of trading using opposite Sichuan Fulin and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.Sichuan Fulin vs. Xiamen Insight Investment | ||
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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