Correlation Between Shandong Longquan and Northern United
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Northern United Publishing, you can compare the effects of market volatilities on Shandong Longquan and Northern United 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 Shandong Longquan with a short position of Northern United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Northern United.
Diversification Opportunities for Shandong Longquan and Northern United
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Northern is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ and Shandong Longquan 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 Shandong Longquan Pipeline are associated (or correlated) with Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Northern United go up and down completely randomly.
Pair Corralation between Shandong Longquan and Northern United
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 1.03 times more return on investment than Northern United. However, Shandong Longquan is 1.03 times more volatile than Northern United Publishing. It trades about 0.07 of its potential returns per unit of risk. Northern United Publishing is currently generating about 0.04 per unit of risk. If you would invest 414.00 in Shandong Longquan Pipeline on September 30, 2024 and sell it today you would earn a total of 49.00 from holding Shandong Longquan Pipeline or generate 11.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Longquan Pipeline vs. Northern United Publishing
Performance |
Timeline |
Shandong Longquan |
Northern United Publ |
Shandong Longquan and Northern United Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Longquan and Northern United
The main advantage of trading using opposite Shandong Longquan and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United's long position.Shandong Longquan vs. Anhui Transport Consulting | ||
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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