Correlation Between Fujian Longzhou and Suzhou Novoprotein
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Suzhou Novoprotein Scientific, you can compare the effects of market volatilities on Fujian Longzhou and Suzhou Novoprotein 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 Fujian Longzhou with a short position of Suzhou Novoprotein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Suzhou Novoprotein.
Diversification Opportunities for Fujian Longzhou and Suzhou Novoprotein
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Suzhou is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Suzhou Novoprotein Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Novoprotein and Fujian Longzhou 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 Fujian Longzhou Transportation are associated (or correlated) with Suzhou Novoprotein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Novoprotein has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Suzhou Novoprotein go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Suzhou Novoprotein
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 2.83 times more return on investment than Suzhou Novoprotein. However, Fujian Longzhou is 2.83 times more volatile than Suzhou Novoprotein Scientific. It trades about -0.01 of its potential returns per unit of risk. Suzhou Novoprotein Scientific is currently generating about -0.05 per unit of risk. If you would invest 467.00 in Fujian Longzhou Transportation on September 25, 2024 and sell it today you would lose (14.00) from holding Fujian Longzhou Transportation or give up 3.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Fujian Longzhou Transportation vs. Suzhou Novoprotein Scientific
Performance |
Timeline |
Fujian Longzhou Tran |
Suzhou Novoprotein |
Fujian Longzhou and Suzhou Novoprotein Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fujian Longzhou and Suzhou Novoprotein
The main advantage of trading using opposite Fujian Longzhou and Suzhou Novoprotein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Suzhou Novoprotein 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 Suzhou Novoprotein will offset losses from the drop in Suzhou Novoprotein's long position.Fujian Longzhou vs. Xiamen Bank Co | Fujian Longzhou vs. Northking Information Technology | Fujian Longzhou vs. Niutech Environment Technology | Fujian Longzhou vs. Western Superconducting Tech |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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