Correlation Between Luolai Home and Inner Mongolia
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By analyzing existing cross correlation between Luolai Home Textile and Inner Mongolia Dazhong, you can compare the effects of market volatilities on Luolai Home and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Inner Mongolia.
Diversification Opportunities for Luolai Home and Inner Mongolia
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luolai and Inner is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Inner Mongolia Dazhong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Dazhong 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Dazhong has no effect on the direction of Luolai Home i.e., Luolai Home and Inner Mongolia go up and down completely randomly.
Pair Corralation between Luolai Home and Inner Mongolia
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.72 times more return on investment than Inner Mongolia. However, Luolai Home is 1.72 times more volatile than Inner Mongolia Dazhong. It trades about -0.08 of its potential returns per unit of risk. Inner Mongolia Dazhong is currently generating about -0.25 per unit of risk. If you would invest 790.00 in Luolai Home Textile on October 23, 2024 and sell it today you would lose (32.00) from holding Luolai Home Textile or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Inner Mongolia Dazhong
Performance |
| Timeline |
| Luolai Home Textile |
| Inner Mongolia Dazhong |
Luolai Home and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Inner Mongolia
The main advantage of trading using opposite Luolai Home and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| Luolai Home vs. Jiamei Food Packaging | Luolai Home vs. Jiahe Foods Industry | Luolai Home vs. Zhongjing Food Co | Luolai Home vs. HaiXin Foods Co |
| Inner Mongolia vs. Luolai Home Textile | Inner Mongolia vs. Xiwang Foodstuffs Co | Inner Mongolia vs. Xiamen Goldenhome Co | Inner Mongolia vs. Tonghua Grape Wine |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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