Correlation Between China Securities and Luolai Home
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By analyzing existing cross correlation between China Securities 800 and Luolai Home Textile, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Luolai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Luolai Home.
Diversification Opportunities for China Securities and Luolai Home
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Luolai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 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 China Securities 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 China Securities 800 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 China Securities i.e., China Securities and Luolai Home go up and down completely randomly.
Pair Corralation between China Securities and Luolai Home
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Luolai Home. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.71 times less risky than Luolai Home. The index trades about -0.11 of its potential returns per unit of risk. The Luolai Home Textile is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 726.00 in Luolai Home Textile on August 29, 2024 and sell it today you would earn a total of 97.00 from holding Luolai Home Textile or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Luolai Home Textile
Performance |
| Timeline |
China Securities and Luolai Home Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Luolai Home Textile
Pair trading matchups for Luolai Home
Pair Trading with China Securities and Luolai Home
The main advantage of trading using opposite China Securities and Luolai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Shandong Ruifeng Chemical | China Securities vs. Zhongtong Guomai Communication | China Securities vs. Gome Telecom Equipment | China Securities vs. Dymatic Chemicals |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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