Correlation Between Guocheng Mining and Lutian Machinery
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By analyzing existing cross correlation between Guocheng Mining Co and Lutian Machinery Co, you can compare the effects of market volatilities on Guocheng Mining 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 Guocheng Mining with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Lutian Machinery.
Diversification Opportunities for Guocheng Mining and Lutian Machinery
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guocheng and Lutian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining 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 Guocheng Mining 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 Guocheng Mining 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 Guocheng Mining i.e., Guocheng Mining and Lutian Machinery go up and down completely randomly.
Pair Corralation between Guocheng Mining and Lutian Machinery
Assuming the 90 days trading horizon Guocheng Mining Co is expected to generate 1.77 times more return on investment than Lutian Machinery. However, Guocheng Mining is 1.77 times more volatile than Lutian Machinery Co. It trades about 0.21 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.05 per unit of risk. If you would invest 1,198 in Guocheng Mining Co on September 1, 2024 and sell it today you would earn a total of 213.00 from holding Guocheng Mining Co or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. Lutian Machinery Co
Performance |
| Timeline |
| Guocheng Mining |
| Lutian Machinery |
Guocheng Mining and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and Lutian Machinery
The main advantage of trading using opposite Guocheng Mining and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining 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.| Guocheng Mining vs. Kweichow Moutai Co | Guocheng Mining vs. Contemporary Amperex Technology | Guocheng Mining vs. G bits Network Technology | Guocheng Mining vs. BYD Co Ltd |
| Lutian Machinery vs. New China Life | Lutian Machinery vs. Ming Yang Smart | Lutian Machinery vs. 159681 | Lutian Machinery vs. 159005 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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