Correlation Between Lier Chemical and Advanced Micro
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By analyzing existing cross correlation between Lier Chemical Co and Advanced Micro Fabrication, you can compare the effects of market volatilities on Lier Chemical and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and Advanced Micro.
Diversification Opportunities for Lier Chemical and Advanced Micro
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lier and Advanced is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and Advanced Micro Fabrication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Fabri 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Fabri has no effect on the direction of Lier Chemical i.e., Lier Chemical and Advanced Micro go up and down completely randomly.
Pair Corralation between Lier Chemical and Advanced Micro
Assuming the 90 days trading horizon Lier Chemical Co is expected to generate 0.73 times more return on investment than Advanced Micro. However, Lier Chemical Co is 1.37 times less risky than Advanced Micro. It trades about 0.07 of its potential returns per unit of risk. Advanced Micro Fabrication is currently generating about -0.23 per unit of risk. If you would invest 873.00 in Lier Chemical Co on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Lier Chemical Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. Advanced Micro Fabrication
Performance |
| Timeline |
| Lier Chemical |
| Advanced Micro Fabri |
Lier Chemical and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and Advanced Micro
The main advantage of trading using opposite Lier Chemical and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Lier Chemical vs. Zijin Mining Group | Lier Chemical vs. Wanhua Chemical Group | Lier Chemical vs. Baoshan Iron Steel | Lier Chemical vs. Rongsheng Petrochemical Co |
| Advanced Micro vs. Dongfeng Automobile Co | Advanced Micro vs. Fiberhome Telecommunication Technologies | Advanced Micro vs. Lier Chemical Co | Advanced Micro vs. Eastern Communications Co |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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