Correlation Between City Development and Lutian Machinery
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By analyzing existing cross correlation between City Development Environment and Lutian Machinery Co, you can compare the effects of market volatilities on City Development 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 City Development with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Development and Lutian Machinery.
Diversification Opportunities for City Development and Lutian Machinery
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Lutian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding City Development Environment and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and City Development 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 City Development Environment 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 City Development i.e., City Development and Lutian Machinery go up and down completely randomly.
Pair Corralation between City Development and Lutian Machinery
Assuming the 90 days trading horizon City Development is expected to generate 1.34 times less return on investment than Lutian Machinery. In addition to that, City Development is 1.09 times more volatile than Lutian Machinery Co. It trades about 0.09 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.13 per unit of volatility. If you would invest 1,202 in Lutian Machinery Co on October 18, 2024 and sell it today you would earn a total of 284.00 from holding Lutian Machinery Co or generate 23.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Development Environment vs. Lutian Machinery Co
Performance |
| Timeline |
| City Development Env |
| Lutian Machinery |
City Development and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Development and Lutian Machinery
The main advantage of trading using opposite City Development and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Development 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.| City Development vs. Guangzhou Jinyi Media | City Development vs. Jahen Household Products | City Development vs. Omnijoi Media Corp | City Development vs. Guangzhou Seagull Kitchen |
| Lutian Machinery vs. City Development Environment | Lutian Machinery vs. Guangdong Liantai Environmental | Lutian Machinery vs. Shenzhen MYS Environmental | Lutian Machinery vs. Anyang Iron Steel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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