Correlation Between Lianhe Chemical and AECC Aviation
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By analyzing existing cross correlation between Lianhe Chemical Technology and AECC Aviation Power, you can compare the effects of market volatilities on Lianhe Chemical and AECC Aviation 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 Lianhe Chemical with a short position of AECC Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and AECC Aviation.
Diversification Opportunities for Lianhe Chemical and AECC Aviation
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lianhe and AECC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and AECC Aviation Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECC Aviation Power and Lianhe Chemical 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 Lianhe Chemical Technology are associated (or correlated) with AECC Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECC Aviation Power has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and AECC Aviation go up and down completely randomly.
Pair Corralation between Lianhe Chemical and AECC Aviation
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 2.08 times more return on investment than AECC Aviation. However, Lianhe Chemical is 2.08 times more volatile than AECC Aviation Power. It trades about 0.17 of its potential returns per unit of risk. AECC Aviation Power is currently generating about -0.26 per unit of risk. If you would invest 544.00 in Lianhe Chemical Technology on November 3, 2024 and sell it today you would earn a total of 51.00 from holding Lianhe Chemical Technology or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. AECC Aviation Power
Performance |
| Timeline |
| Lianhe Chemical Tech |
| AECC Aviation Power |
Lianhe Chemical and AECC Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and AECC Aviation
The main advantage of trading using opposite Lianhe Chemical and AECC Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, AECC Aviation 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 AECC Aviation will offset losses from the drop in AECC Aviation's long position.| Lianhe Chemical vs. Ningbo Construction Co | Lianhe Chemical vs. Baoding Dongli Machinery | Lianhe Chemical vs. Anhui Transport Consulting | Lianhe Chemical vs. Lutian Machinery Co |
| AECC Aviation vs. Wuxi Double Elephant | AECC Aviation vs. Luyin Investment Group | AECC Aviation vs. Zhejiang Construction Investment | AECC Aviation vs. Postal Savings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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