Correlation Between Haima Automobile and Luolai Home
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By analyzing existing cross correlation between Haima Automobile Group and Luolai Home Textile, you can compare the effects of market volatilities on Haima Automobile and Luolai Home 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 Haima Automobile with a short position of Luolai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haima Automobile and Luolai Home.
Diversification Opportunities for Haima Automobile and Luolai Home
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haima and Luolai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Haima Automobile Group and Luolai Home Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luolai Home Textile and Haima Automobile 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 Haima Automobile Group are associated (or correlated) with Luolai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luolai Home Textile has no effect on the direction of Haima Automobile i.e., Haima Automobile and Luolai Home go up and down completely randomly.
Pair Corralation between Haima Automobile and Luolai Home
Assuming the 90 days trading horizon Haima Automobile Group is expected to generate 2.67 times more return on investment than Luolai Home. However, Haima Automobile is 2.67 times more volatile than Luolai Home Textile. It trades about 0.11 of its potential returns per unit of risk. Luolai Home Textile is currently generating about 0.25 per unit of risk. If you would invest 399.00 in Haima Automobile Group on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Haima Automobile Group or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haima Automobile Group vs. Luolai Home Textile
Performance |
| Timeline |
| Haima Automobile |
| Luolai Home Textile |
Haima Automobile and Luolai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haima Automobile and Luolai Home
The main advantage of trading using opposite Haima Automobile and Luolai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haima Automobile position performs unexpectedly, Luolai Home 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 Luolai Home will offset losses from the drop in Luolai Home's long position.| Haima Automobile vs. Lutian Machinery Co | Haima Automobile vs. China Longyuan Power | Haima Automobile vs. Changshu Tongrun Auto | Haima Automobile vs. PetroChina Co Ltd |
| Luolai Home vs. BeiGene | Luolai Home vs. Kweichow Moutai Co | Luolai Home vs. Beijing Roborock Technology | Luolai Home vs. G bits Network Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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