Correlation Between Luzhou Lao and Shantui Construction
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By analyzing existing cross correlation between Luzhou Lao Jiao and Shantui Construction Machinery, you can compare the effects of market volatilities on Luzhou Lao and Shantui Construction 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 Luzhou Lao with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luzhou Lao and Shantui Construction.
Diversification Opportunities for Luzhou Lao and Shantui Construction
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luzhou and Shantui is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Luzhou Lao Jiao and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Luzhou Lao 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 Luzhou Lao Jiao are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Luzhou Lao i.e., Luzhou Lao and Shantui Construction go up and down completely randomly.
Pair Corralation between Luzhou Lao and Shantui Construction
Assuming the 90 days trading horizon Luzhou Lao Jiao is expected to under-perform the Shantui Construction. But the stock apears to be less risky and, when comparing its historical volatility, Luzhou Lao Jiao is 1.23 times less risky than Shantui Construction. The stock trades about -0.03 of its potential returns per unit of risk. The Shantui Construction Machinery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 459.00 in Shantui Construction Machinery on August 29, 2024 and sell it today you would earn a total of 555.00 from holding Shantui Construction Machinery or generate 120.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luzhou Lao Jiao vs. Shantui Construction Machinery
Performance |
| Timeline |
| Luzhou Lao Jiao |
| Shantui Construction |
Luzhou Lao and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luzhou Lao and Shantui Construction
The main advantage of trading using opposite Luzhou Lao and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luzhou Lao position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Luzhou Lao vs. Shanghai Metersbonwe FashionAccessories | Luzhou Lao vs. Lootom Telcovideo Network | Luzhou Lao vs. Hangzhou Pinming Software | Luzhou Lao vs. Fiberhome Telecommunication Technologies |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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