Correlation Between Luolai Home and Eastern Air
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By analyzing existing cross correlation between Luolai Home Textile and Eastern Air Logistics, you can compare the effects of market volatilities on Luolai Home and Eastern Air 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 Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Eastern Air.
Diversification Opportunities for Luolai Home and Eastern Air
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luolai and Eastern is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics 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 Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of Luolai Home i.e., Luolai Home and Eastern Air go up and down completely randomly.
Pair Corralation between Luolai Home and Eastern Air
Assuming the 90 days trading horizon Luolai Home Textile is expected to under-perform the Eastern Air. But the stock apears to be less risky and, when comparing its historical volatility, Luolai Home Textile is 1.28 times less risky than Eastern Air. The stock trades about -0.02 of its potential returns per unit of risk. The Eastern Air Logistics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,472 in Eastern Air Logistics on October 11, 2024 and sell it today you would earn a total of 221.00 from holding Eastern Air Logistics or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Eastern Air Logistics
Performance |
| Timeline |
| Luolai Home Textile |
| Eastern Air Logistics |
Luolai Home and Eastern Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Eastern Air
The main advantage of trading using opposite Luolai Home and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air'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 |
| Eastern Air vs. Eastern Communications Co | Eastern Air vs. Runjian Communication Co | Eastern Air vs. Nanxing Furniture Machinery | Eastern Air 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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