Correlation Between Zhejiang Yinlun and Lutian Machinery
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Lutian Machinery Co, you can compare the effects of market volatilities on Zhejiang Yinlun 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 Zhejiang Yinlun with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Lutian Machinery.
Diversification Opportunities for Zhejiang Yinlun and Lutian Machinery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Lutian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Zhejiang Yinlun 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 Zhejiang Yinlun Machinery 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 Zhejiang Yinlun i.e., Zhejiang Yinlun and Lutian Machinery go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Lutian Machinery
Assuming the 90 days trading horizon Zhejiang Yinlun Machinery is expected to generate 1.09 times more return on investment than Lutian Machinery. However, Zhejiang Yinlun is 1.09 times more volatile than Lutian Machinery Co. It trades about 0.01 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.0 per unit of risk. If you would invest 1,786 in Zhejiang Yinlun Machinery on September 12, 2024 and sell it today you would lose (7.00) from holding Zhejiang Yinlun Machinery or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Lutian Machinery Co
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
| Lutian Machinery |
Zhejiang Yinlun and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Lutian Machinery
The main advantage of trading using opposite Zhejiang Yinlun and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun 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.| Zhejiang Yinlun vs. Lutian Machinery Co | Zhejiang Yinlun vs. PetroChina Co Ltd | Zhejiang Yinlun vs. Bank of China | Zhejiang Yinlun vs. Gansu Jiu Steel |
| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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