Correlation Between Luolai Home and Yili Chuanning
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By analyzing existing cross correlation between Luolai Home Textile and Yili Chuanning Biotechnology, you can compare the effects of market volatilities on Luolai Home and Yili Chuanning 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 Yili Chuanning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Yili Chuanning.
Diversification Opportunities for Luolai Home and Yili Chuanning
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luolai and Yili is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Yili Chuanning Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yili Chuanning Biote 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 Yili Chuanning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yili Chuanning Biote has no effect on the direction of Luolai Home i.e., Luolai Home and Yili Chuanning go up and down completely randomly.
Pair Corralation between Luolai Home and Yili Chuanning
Assuming the 90 days trading horizon Luolai Home Textile is expected to under-perform the Yili Chuanning. In addition to that, Luolai Home is 1.26 times more volatile than Yili Chuanning Biotechnology. It trades about -0.19 of its total potential returns per unit of risk. Yili Chuanning Biotechnology is currently generating about -0.12 per unit of volatility. If you would invest 1,321 in Yili Chuanning Biotechnology on October 30, 2024 and sell it today you would lose (114.00) from holding Yili Chuanning Biotechnology or give up 8.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Yili Chuanning Biotechnology
Performance |
| Timeline |
| Luolai Home Textile |
| Yili Chuanning Biote |
Luolai Home and Yili Chuanning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Yili Chuanning
The main advantage of trading using opposite Luolai Home and Yili Chuanning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Yili Chuanning 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 Yili Chuanning will offset losses from the drop in Yili Chuanning's long position.| Luolai Home vs. Xinhua Winshare Publishing | Luolai Home vs. Duzhe Publishing Media | Luolai Home vs. Liuzhou Chemical Industry | Luolai Home vs. Offshore Oil Engineering |
| Yili Chuanning vs. Huizhou Speed Wireless | Yili Chuanning vs. Lontium Semiconductor Corp | Yili Chuanning vs. Southern PublishingMedia Co | Yili Chuanning vs. Shandong Publishing Media |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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