Correlation Between Luolai Home and Ye Chiu
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By analyzing existing cross correlation between Luolai Home Textile and Ye Chiu Metal, you can compare the effects of market volatilities on Luolai Home and Ye Chiu 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 Ye Chiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Ye Chiu.
Diversification Opportunities for Luolai Home and Ye Chiu
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luolai and 601388 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu Metal 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 Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Luolai Home i.e., Luolai Home and Ye Chiu go up and down completely randomly.
Pair Corralation between Luolai Home and Ye Chiu
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.18 times more return on investment than Ye Chiu. However, Luolai Home is 1.18 times more volatile than Ye Chiu Metal. It trades about -0.06 of its potential returns per unit of risk. Ye Chiu Metal is currently generating about -0.55 per unit of risk. If you would invest 862.00 in Luolai Home Textile on October 12, 2024 and sell it today you would lose (29.00) from holding Luolai Home Textile or give up 3.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Luolai Home Textile vs. Ye Chiu Metal
Performance |
Timeline |
Luolai Home Textile |
Ye Chiu Metal |
Luolai Home and Ye Chiu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luolai Home and Ye Chiu
The main advantage of trading using opposite Luolai Home and Ye Chiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Ye Chiu 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 Ye Chiu will offset losses from the drop in Ye Chiu'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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