Correlation Between Luxi Chemical and Zhejiang Qianjiang
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By analyzing existing cross correlation between Luxi Chemical Group and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Luxi Chemical and Zhejiang Qianjiang 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 Luxi Chemical with a short position of Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxi Chemical and Zhejiang Qianjiang.
Diversification Opportunities for Luxi Chemical and Zhejiang Qianjiang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luxi and Zhejiang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Luxi Chemical Group and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang and Luxi Chemical 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 Luxi Chemical Group are associated (or correlated) with Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Luxi Chemical i.e., Luxi Chemical and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Luxi Chemical and Zhejiang Qianjiang
Assuming the 90 days trading horizon Luxi Chemical is expected to generate 3.09 times less return on investment than Zhejiang Qianjiang. But when comparing it to its historical volatility, Luxi Chemical Group is 1.52 times less risky than Zhejiang Qianjiang. It trades about 0.0 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,816 in Zhejiang Qianjiang Motorcycle on September 4, 2024 and sell it today you would lose (110.00) from holding Zhejiang Qianjiang Motorcycle or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxi Chemical Group vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Luxi Chemical Group |
| Zhejiang Qianjiang |
Luxi Chemical and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxi Chemical and Zhejiang Qianjiang
The main advantage of trading using opposite Luxi Chemical and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxi Chemical position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Luxi Chemical vs. Shenzhen Glory Medical | Luxi Chemical vs. Maider Medical Industry | Luxi Chemical vs. Double Medical Technology | Luxi Chemical vs. Contec Medical Systems |
| Zhejiang Qianjiang vs. Bank of China | Zhejiang Qianjiang vs. Kweichow Moutai Co | Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. Bank of Communications |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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