Correlation Between Luolai Home and Chongqing Shunbo
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By analyzing existing cross correlation between Luolai Home Textile and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Luolai Home and Chongqing Shunbo 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 Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Chongqing Shunbo.
Diversification Opportunities for Luolai Home and Chongqing Shunbo
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luolai and Chongqing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum 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 Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Luolai Home i.e., Luolai Home and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Luolai Home and Chongqing Shunbo
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.03 times more return on investment than Chongqing Shunbo. However, Luolai Home is 1.03 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.06 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.04 per unit of risk. If you would invest 723.00 in Luolai Home Textile on October 14, 2024 and sell it today you would earn a total of 59.00 from holding Luolai Home Textile or generate 8.16% 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. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Luolai Home Textile |
| Chongqing Shunbo Aluminum |
Luolai Home and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Chongqing Shunbo
The main advantage of trading using opposite Luolai Home and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Luolai Home vs. State Grid InformationCommunication | Luolai Home vs. Eastroc Beverage Group | Luolai Home vs. Ligao Foods CoLtd | Luolai Home vs. Sunwave Communications Co |
| Chongqing Shunbo vs. Shandong Homey Aquatic | Chongqing Shunbo vs. Vohringer Home Technology | Chongqing Shunbo vs. UE Furniture Co | Chongqing Shunbo vs. Luolai Home Textile |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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