Correlation Between Lonkey Industrial and Yunnan Xiyi
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By analyzing existing cross correlation between Lonkey Industrial Co and Yunnan Xiyi Industrial, you can compare the effects of market volatilities on Lonkey Industrial and Yunnan Xiyi 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 Lonkey Industrial with a short position of Yunnan Xiyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonkey Industrial and Yunnan Xiyi.
Diversification Opportunities for Lonkey Industrial and Yunnan Xiyi
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lonkey and Yunnan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lonkey Industrial Co and Yunnan Xiyi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Xiyi Industrial and Lonkey Industrial 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 Lonkey Industrial Co are associated (or correlated) with Yunnan Xiyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Xiyi Industrial has no effect on the direction of Lonkey Industrial i.e., Lonkey Industrial and Yunnan Xiyi go up and down completely randomly.
Pair Corralation between Lonkey Industrial and Yunnan Xiyi
Assuming the 90 days trading horizon Lonkey Industrial Co is expected to generate 0.35 times more return on investment than Yunnan Xiyi. However, Lonkey Industrial Co is 2.84 times less risky than Yunnan Xiyi. It trades about 0.17 of its potential returns per unit of risk. Yunnan Xiyi Industrial is currently generating about -0.15 per unit of risk. If you would invest 293.00 in Lonkey Industrial Co on December 1, 2024 and sell it today you would earn a total of 14.00 from holding Lonkey Industrial Co or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lonkey Industrial Co vs. Yunnan Xiyi Industrial
Performance |
| Timeline |
| Lonkey Industrial |
| Yunnan Xiyi Industrial |
Lonkey Industrial and Yunnan Xiyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonkey Industrial and Yunnan Xiyi
The main advantage of trading using opposite Lonkey Industrial and Yunnan Xiyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonkey Industrial position performs unexpectedly, Yunnan Xiyi 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 Yunnan Xiyi will offset losses from the drop in Yunnan Xiyi's long position.The idea behind Lonkey Industrial Co and Yunnan Xiyi Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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