Correlation Between Longjian Road and Ming Yang
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By analyzing existing cross correlation between Longjian Road Bridge and Ming Yang Smart, you can compare the effects of market volatilities on Longjian Road and Ming Yang 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 Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longjian Road and Ming Yang.
Diversification Opportunities for Longjian Road and Ming Yang
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longjian and Ming is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Longjian Road Bridge and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart 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 Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of Longjian Road i.e., Longjian Road and Ming Yang go up and down completely randomly.
Pair Corralation between Longjian Road and Ming Yang
Assuming the 90 days trading horizon Longjian Road Bridge is expected to generate 1.27 times more return on investment than Ming Yang. However, Longjian Road is 1.27 times more volatile than Ming Yang Smart. It trades about 0.02 of its potential returns per unit of risk. Ming Yang Smart is currently generating about -0.05 per unit of risk. If you would invest 395.00 in Longjian Road Bridge on September 26, 2024 and sell it today you would earn a total of 36.00 from holding Longjian Road Bridge or generate 9.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Longjian Road Bridge vs. Ming Yang Smart
Performance |
Timeline |
Longjian Road Bridge |
Ming Yang Smart |
Longjian Road and Ming Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Longjian Road and Ming Yang
The main advantage of trading using opposite Longjian Road and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longjian Road position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang's long position.Longjian Road vs. Ming Yang Smart | Longjian Road vs. 159681 | Longjian Road vs. 159005 | Longjian Road vs. Loctek Ergonomic Technology |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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