Correlation Between Luolai Home and Hunan Mendale
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By analyzing existing cross correlation between Luolai Home Textile and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Luolai Home and Hunan Mendale 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 Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Hunan Mendale.
Diversification Opportunities for Luolai Home and Hunan Mendale
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luolai and Hunan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile 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 Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Luolai Home i.e., Luolai Home and Hunan Mendale go up and down completely randomly.
Pair Corralation between Luolai Home and Hunan Mendale
Assuming the 90 days trading horizon Luolai Home is expected to generate 18.16 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Luolai Home Textile is 3.15 times less risky than Hunan Mendale. It trades about 0.06 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Hunan Mendale Hometextile on November 27, 2024 and sell it today you would earn a total of 69.00 from holding Hunan Mendale Hometextile or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Luolai Home Textile |
| Hunan Mendale Hometextile |
Luolai Home and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Hunan Mendale
The main advantage of trading using opposite Luolai Home and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| Luolai Home vs. Nancal Energy Saving Tech | Luolai Home vs. Inspur Software Co | Luolai Home vs. Bank of Suzhou | Luolai Home vs. Financial Street Holdings |
| Hunan Mendale vs. Gan Yuan Foods | Hunan Mendale vs. Xiangpiaopiao Food Co | Hunan Mendale vs. Suzhou Oriental Semiconductor | Hunan Mendale vs. Air China Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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