Correlation Between Luolai Home and Shandong
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By analyzing existing cross correlation between Luolai Home Textile and Shandong Hi Speed RoadBridge, you can compare the effects of market volatilities on Luolai Home and Shandong 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 Luolai Home with a short position of Shandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Shandong.
Diversification Opportunities for Luolai Home and Shandong
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luolai and Shandong is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Shandong Hi Speed RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hi Speed and Luolai Home 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 Luolai Home Textile are associated (or correlated) with Shandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hi Speed has no effect on the direction of Luolai Home i.e., Luolai Home and Shandong go up and down completely randomly.
Pair Corralation between Luolai Home and Shandong
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 0.97 times more return on investment than Shandong. However, Luolai Home Textile is 1.03 times less risky than Shandong. It trades about 0.21 of its potential returns per unit of risk. Shandong Hi Speed RoadBridge is currently generating about 0.19 per unit of risk. If you would invest 629.00 in Luolai Home Textile on September 12, 2024 and sell it today you would earn a total of 233.00 from holding Luolai Home Textile or generate 37.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Shandong Hi Speed RoadBridge
Performance |
| Timeline |
| Luolai Home Textile |
| Shandong Hi Speed |
Luolai Home and Shandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Shandong
The main advantage of trading using opposite Luolai Home and Shandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Shandong 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 Shandong will offset losses from the drop in Shandong's long position.| Luolai Home vs. Nanjing Putian Telecommunications | Luolai Home vs. Tianjin Realty Development | Luolai Home vs. Kangyue Technology Co | Luolai Home vs. Shenzhen Hifuture Electric |
| Shandong vs. Ming Yang Smart | Shandong vs. 159681 | Shandong vs. 159005 | Shandong vs. Loctek Ergonomic Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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