Correlation Between Xiwang Foodstuffs and Lutian Machinery
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By analyzing existing cross correlation between Xiwang Foodstuffs Co and Lutian Machinery Co, you can compare the effects of market volatilities on Xiwang Foodstuffs and Lutian Machinery 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 Xiwang Foodstuffs with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiwang Foodstuffs and Lutian Machinery.
Diversification Opportunities for Xiwang Foodstuffs and Lutian Machinery
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xiwang and Lutian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xiwang Foodstuffs Co and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Xiwang Foodstuffs 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 Xiwang Foodstuffs Co are associated (or correlated) with Lutian Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lutian Machinery has no effect on the direction of Xiwang Foodstuffs i.e., Xiwang Foodstuffs and Lutian Machinery go up and down completely randomly.
Pair Corralation between Xiwang Foodstuffs and Lutian Machinery
Assuming the 90 days trading horizon Xiwang Foodstuffs Co is expected to generate 3.01 times more return on investment than Lutian Machinery. However, Xiwang Foodstuffs is 3.01 times more volatile than Lutian Machinery Co. It trades about 0.22 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.12 per unit of risk. If you would invest 319.00 in Xiwang Foodstuffs Co on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Xiwang Foodstuffs Co or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiwang Foodstuffs Co vs. Lutian Machinery Co
Performance |
| Timeline |
| Xiwang Foodstuffs |
| Lutian Machinery |
Xiwang Foodstuffs and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiwang Foodstuffs and Lutian Machinery
The main advantage of trading using opposite Xiwang Foodstuffs and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiwang Foodstuffs position performs unexpectedly, Lutian Machinery 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 Lutian Machinery will offset losses from the drop in Lutian Machinery's long position.| Xiwang Foodstuffs vs. Penyao Environmental Protection | Xiwang Foodstuffs vs. Anhui Fuhuang Steel | Xiwang Foodstuffs vs. Bengang Steel Plates | Xiwang Foodstuffs vs. Shenzhen MYS Environmental |
| Lutian Machinery vs. Hangzhou Gaoxin Rubber | Lutian Machinery vs. Chengtun Mining Group | Lutian Machinery vs. Eastern Air Logistics | Lutian Machinery vs. Suzhou Xingye Material |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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