Correlation Between Longjian Road and Zotye Automobile
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By analyzing existing cross correlation between Longjian Road Bridge and Zotye Automobile Co, you can compare the effects of market volatilities on Longjian Road and Zotye Automobile 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 Longjian Road with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Zotye Automobile.
Diversification Opportunities for Longjian Road and Zotye Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longjian and Zotye is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and Longjian Road 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 Longjian Road Bridge are associated (or correlated) with Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Longjian Road i.e., Longjian Road and Zotye Automobile go up and down completely randomly.
Pair Corralation between Longjian Road and Zotye Automobile
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 0.76 times more return on investment than Zotye Automobile. However, Longjian Road Bridge is 1.32 times less risky than Zotye Automobile. It trades about 0.01 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 408.00 in Longjian Road Bridge on October 25, 2024 and sell it today you would lose (40.00) from holding Longjian Road Bridge or give up 9.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Longjian Road Bridge vs. Zotye Automobile Co
Performance |
Timeline |
Longjian Road Bridge |
Zotye Automobile |
Longjian Road and Zotye Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Longjian Road and Zotye Automobile
The main advantage of trading using opposite Longjian Road and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.Longjian Road vs. Industrial and Commercial | Longjian Road vs. China Construction Bank | Longjian Road vs. Agricultural Bank of | Longjian Road vs. Bank of China |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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