Correlation Between Yunnan Xiyi and Lutian Machinery
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By analyzing existing cross correlation between Yunnan Xiyi Industrial and Lutian Machinery Co, you can compare the effects of market volatilities on Yunnan Xiyi 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 Yunnan Xiyi with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Xiyi and Lutian Machinery.
Diversification Opportunities for Yunnan Xiyi and Lutian Machinery
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Lutian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Xiyi Industrial and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Yunnan Xiyi 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 Yunnan Xiyi Industrial 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 Yunnan Xiyi i.e., Yunnan Xiyi and Lutian Machinery go up and down completely randomly.
Pair Corralation between Yunnan Xiyi and Lutian Machinery
Assuming the 90 days trading horizon Yunnan Xiyi Industrial is expected to generate 3.03 times more return on investment than Lutian Machinery. However, Yunnan Xiyi is 3.03 times more volatile than Lutian Machinery Co. It trades about 0.58 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 1,214 in Yunnan Xiyi Industrial on September 13, 2024 and sell it today you would earn a total of 1,120 from holding Yunnan Xiyi Industrial or generate 92.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Xiyi Industrial vs. Lutian Machinery Co
Performance |
| Timeline |
| Yunnan Xiyi Industrial |
| Lutian Machinery |
Yunnan Xiyi and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Xiyi and Lutian Machinery
The main advantage of trading using opposite Yunnan Xiyi and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Xiyi 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.| Yunnan Xiyi vs. BeiGene | Yunnan Xiyi vs. Kweichow Moutai Co | Yunnan Xiyi vs. Beijing Roborock Technology | Yunnan Xiyi vs. G bits Network Technology |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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