Correlation Between Linzhou Heavy and Southern PublishingMedia
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Southern PublishingMedia Co, you can compare the effects of market volatilities on Linzhou Heavy and Southern PublishingMedia 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 Linzhou Heavy with a short position of Southern PublishingMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Southern PublishingMedia.
Diversification Opportunities for Linzhou Heavy and Southern PublishingMedia
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Linzhou and Southern is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and Southern PublishingMedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern PublishingMedia and Linzhou Heavy 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 Linzhou Heavy Machinery are associated (or correlated) with Southern PublishingMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern PublishingMedia has no effect on the direction of Linzhou Heavy i.e., Linzhou Heavy and Southern PublishingMedia go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Southern PublishingMedia
Assuming the 90 days trading horizon Linzhou Heavy is expected to generate 1.18 times less return on investment than Southern PublishingMedia. In addition to that, Linzhou Heavy is 1.03 times more volatile than Southern PublishingMedia Co. It trades about 0.04 of its total potential returns per unit of risk. Southern PublishingMedia Co is currently generating about 0.05 per unit of volatility. If you would invest 1,444 in Southern PublishingMedia Co on September 26, 2024 and sell it today you would earn a total of 34.00 from holding Southern PublishingMedia Co or generate 2.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Linzhou Heavy Machinery vs. Southern PublishingMedia Co
Performance |
Timeline |
Linzhou Heavy Machinery |
Southern PublishingMedia |
Linzhou Heavy and Southern PublishingMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Linzhou Heavy and Southern PublishingMedia
The main advantage of trading using opposite Linzhou Heavy and Southern PublishingMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy position performs unexpectedly, Southern PublishingMedia 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 Southern PublishingMedia will offset losses from the drop in Southern PublishingMedia's long position.Linzhou Heavy vs. Bank of China | Linzhou Heavy vs. Kweichow Moutai Co | Linzhou Heavy vs. PetroChina Co Ltd | Linzhou Heavy vs. Bank of Communications |
Southern PublishingMedia vs. PetroChina Co Ltd | Southern PublishingMedia vs. China Mobile Limited | Southern PublishingMedia vs. CNOOC Limited | Southern PublishingMedia vs. Ping An Insurance |
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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