Correlation Between Luolai Home and Shandong Sanyuan
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By analyzing existing cross correlation between Luolai Home Textile and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Luolai Home and Shandong Sanyuan 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 Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Shandong Sanyuan.
Diversification Opportunities for Luolai Home and Shandong Sanyuan
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luolai and Shandong is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio 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 Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Luolai Home i.e., Luolai Home and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Luolai Home and Shandong Sanyuan
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 0.84 times more return on investment than Shandong Sanyuan. However, Luolai Home Textile is 1.19 times less risky than Shandong Sanyuan. It trades about -0.02 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 1,034 in Luolai Home Textile on October 11, 2024 and sell it today you would lose (192.00) from holding Luolai Home Textile or give up 18.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Luolai Home Textile |
| Shandong Sanyuan Bio |
Luolai Home and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Shandong Sanyuan
The main advantage of trading using opposite Luolai Home and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Shandong Sanyuan 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 Shandong Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.| Luolai Home vs. BYD Co Ltd | Luolai Home vs. China Mobile Limited | Luolai Home vs. Agricultural Bank of | Luolai Home vs. Industrial and Commercial |
| Shandong Sanyuan vs. Luolai Home Textile | Shandong Sanyuan vs. Easyhome New Retail | Shandong Sanyuan vs. China Sports Industry | Shandong Sanyuan vs. Sanbo Hospital Management |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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