Correlation Between Nanjing Yunhai and Lutian Machinery
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By analyzing existing cross correlation between Nanjing Yunhai Special and Lutian Machinery Co, you can compare the effects of market volatilities on Nanjing Yunhai 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 Nanjing Yunhai with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Yunhai and Lutian Machinery.
Diversification Opportunities for Nanjing Yunhai and Lutian Machinery
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Lutian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Yunhai Special and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Nanjing Yunhai 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 Nanjing Yunhai Special 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 Nanjing Yunhai i.e., Nanjing Yunhai and Lutian Machinery go up and down completely randomly.
Pair Corralation between Nanjing Yunhai and Lutian Machinery
Assuming the 90 days trading horizon Nanjing Yunhai Special is expected to generate 2.16 times more return on investment than Lutian Machinery. However, Nanjing Yunhai is 2.16 times more volatile than Lutian Machinery Co. It trades about 0.23 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.09 per unit of risk. If you would invest 1,116 in Nanjing Yunhai Special on September 13, 2024 and sell it today you would earn a total of 215.00 from holding Nanjing Yunhai Special or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Yunhai Special vs. Lutian Machinery Co
Performance |
| Timeline |
| Nanjing Yunhai Special |
| Lutian Machinery |
Nanjing Yunhai and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Yunhai and Lutian Machinery
The main advantage of trading using opposite Nanjing Yunhai and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Yunhai 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.| Nanjing Yunhai vs. Ye Chiu Metal | Nanjing Yunhai vs. Qingdao Choho Industrial | Nanjing Yunhai vs. Hainan Mining Co | Nanjing Yunhai vs. Chengtun Mining Group |
| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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