Correlation Between China Securities and Lutian Machinery
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By analyzing existing cross correlation between China Securities 800 and Lutian Machinery Co, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Lutian Machinery.
Diversification Opportunities for China Securities and Lutian Machinery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Lutian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery 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 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 China Securities i.e., China Securities and Lutian Machinery go up and down completely randomly.
Pair Corralation between China Securities and Lutian Machinery
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.79 times more return on investment than Lutian Machinery. However, China Securities 800 is 1.27 times less risky than Lutian Machinery. It trades about 0.04 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.03 per unit of risk. If you would invest 386,365 in China Securities 800 on August 29, 2024 and sell it today you would earn a total of 25,742 from holding China Securities 800 or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
China Securities 800 vs. Lutian Machinery Co
Performance |
| Timeline |
China Securities and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Lutian Machinery Co
Pair trading matchups for Lutian Machinery
Pair Trading with China Securities and Lutian Machinery
The main advantage of trading using opposite China Securities and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Shandong Ruifeng Chemical | China Securities vs. Zhongtong Guomai Communication | China Securities vs. Gome Telecom Equipment | China Securities vs. Dymatic Chemicals |
| Lutian Machinery vs. Biwin Storage Technology | Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Construction Bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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