Correlation Between Luolai Home and Jiangsu Xinning
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By analyzing existing cross correlation between Luolai Home Textile and Jiangsu Xinning Modern, you can compare the effects of market volatilities on Luolai Home and Jiangsu Xinning 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 Jiangsu Xinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Jiangsu Xinning.
Diversification Opportunities for Luolai Home and Jiangsu Xinning
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luolai and Jiangsu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Jiangsu Xinning Modern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinning Modern 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 Jiangsu Xinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinning Modern has no effect on the direction of Luolai Home i.e., Luolai Home and Jiangsu Xinning go up and down completely randomly.
Pair Corralation between Luolai Home and Jiangsu Xinning
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 0.61 times more return on investment than Jiangsu Xinning. However, Luolai Home Textile is 1.64 times less risky than Jiangsu Xinning. It trades about -0.08 of its potential returns per unit of risk. Jiangsu Xinning Modern is currently generating about -0.21 per unit of risk. If you would invest 790.00 in Luolai Home Textile on October 24, 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. Jiangsu Xinning Modern
Performance |
| Timeline |
| Luolai Home Textile |
| Jiangsu Xinning Modern |
Luolai Home and Jiangsu Xinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Jiangsu Xinning
The main advantage of trading using opposite Luolai Home and Jiangsu Xinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Jiangsu Xinning 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 Jiangsu Xinning will offset losses from the drop in Jiangsu Xinning's long position.| Luolai Home vs. Qtone Education Group | Luolai Home vs. Anhui Transport Consulting | Luolai Home vs. Heilongjiang Publishing Media | Luolai Home vs. Xinhua Winshare Publishing |
| Jiangsu Xinning vs. China Petroleum Chemical | Jiangsu Xinning vs. PetroChina Co Ltd | Jiangsu Xinning vs. China State Construction | Jiangsu Xinning vs. China Railway Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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