Correlation Between Lier Chemical and Kunwu Jiuding
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By analyzing existing cross correlation between Lier Chemical Co and Kunwu Jiuding Investment, you can compare the effects of market volatilities on Lier Chemical and Kunwu Jiuding 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 Lier Chemical with a short position of Kunwu Jiuding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and Kunwu Jiuding.
Diversification Opportunities for Lier Chemical and Kunwu Jiuding
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lier and Kunwu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and Kunwu Jiuding Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunwu Jiuding Investment and Lier 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 Lier Chemical Co are associated (or correlated) with Kunwu Jiuding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunwu Jiuding Investment has no effect on the direction of Lier Chemical i.e., Lier Chemical and Kunwu Jiuding go up and down completely randomly.
Pair Corralation between Lier Chemical and Kunwu Jiuding
Assuming the 90 days trading horizon Lier Chemical Co is expected to generate 0.89 times more return on investment than Kunwu Jiuding. However, Lier Chemical Co is 1.13 times less risky than Kunwu Jiuding. It trades about 0.1 of its potential returns per unit of risk. Kunwu Jiuding Investment is currently generating about -0.01 per unit of risk. If you would invest 864.00 in Lier Chemical Co on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Lier Chemical Co or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. Kunwu Jiuding Investment
Performance |
| Timeline |
| Lier Chemical |
| Kunwu Jiuding Investment |
Lier Chemical and Kunwu Jiuding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and Kunwu Jiuding
The main advantage of trading using opposite Lier Chemical and Kunwu Jiuding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, Kunwu Jiuding 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 Kunwu Jiuding will offset losses from the drop in Kunwu Jiuding's long position.| Lier Chemical vs. Zijin Mining Group | Lier Chemical vs. Wanhua Chemical Group | Lier Chemical vs. Baoshan Iron Steel | Lier Chemical vs. Shandong Gold Mining |
| Kunwu Jiuding vs. Lier Chemical Co | Kunwu Jiuding vs. Shenyang Chemical Industry | Kunwu Jiuding vs. Guangzhou Jinyi Media | Kunwu Jiuding vs. Beijing Jiaman Dress |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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