Correlation Between Luolai Home and Cangzhou Mingzhu
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By analyzing existing cross correlation between Luolai Home Textile and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on Luolai Home and Cangzhou Mingzhu 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 Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Cangzhou Mingzhu.
Diversification Opportunities for Luolai Home and Cangzhou Mingzhu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luolai and Cangzhou is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of Luolai Home i.e., Luolai Home and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between Luolai Home and Cangzhou Mingzhu
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.28 times more return on investment than Cangzhou Mingzhu. However, Luolai Home is 1.28 times more volatile than Cangzhou Mingzhu Plastic. It trades about 0.25 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about -0.02 per unit of risk. If you would invest 726.00 in Luolai Home Textile on August 29, 2024 and sell it today you would earn a total of 97.00 from holding Luolai Home Textile or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| Luolai Home Textile |
| Cangzhou Mingzhu Plastic |
Luolai Home and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Cangzhou Mingzhu
The main advantage of trading using opposite Luolai Home and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.| Luolai Home vs. BeiGene | Luolai Home vs. Kweichow Moutai Co | Luolai Home vs. Beijing Roborock Technology | Luolai Home vs. G bits Network Technology |
| Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. COL Digital Publishing | Cangzhou Mingzhu vs. Suzhou Novoprotein Scientific | Cangzhou Mingzhu vs. Xiangyang Automobile Bearing |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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