Correlation Between Liuzhou Chemical and China World
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By analyzing existing cross correlation between Liuzhou Chemical Industry and China World Trade, you can compare the effects of market volatilities on Liuzhou Chemical and China World 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 Liuzhou Chemical with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and China World.
Diversification Opportunities for Liuzhou Chemical and China World
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liuzhou and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and China World go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and China World
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 2.59 times more return on investment than China World. However, Liuzhou Chemical is 2.59 times more volatile than China World Trade. It trades about 0.24 of its potential returns per unit of risk. China World Trade is currently generating about 0.04 per unit of risk. If you would invest 252.00 in Liuzhou Chemical Industry on October 21, 2024 and sell it today you would earn a total of 176.00 from holding Liuzhou Chemical Industry or generate 69.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Liuzhou Chemical Industry vs. China World Trade
Performance |
Timeline |
Liuzhou Chemical Industry |
China World Trade |
Liuzhou Chemical and China World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liuzhou Chemical and China World
The main advantage of trading using opposite Liuzhou Chemical and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, China World 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 China World will offset losses from the drop in China World's long position.Liuzhou Chemical vs. North Copper Shanxi | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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