Correlation Between Luolai Home and Shanghai Pharmaceuticals
Specify exactly 2 symbols:
By analyzing existing cross correlation between Luolai Home Textile and Shanghai Pharmaceuticals Holding, you can compare the effects of market volatilities on Luolai Home and Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Shanghai Pharmaceuticals.
Diversification Opportunities for Luolai Home and Shanghai Pharmaceuticals
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luolai and Shanghai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Shanghai Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pharmaceuticals has no effect on the direction of Luolai Home i.e., Luolai Home and Shanghai Pharmaceuticals go up and down completely randomly.
Pair Corralation between Luolai Home and Shanghai Pharmaceuticals
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.5 times more return on investment than Shanghai Pharmaceuticals. However, Luolai Home is 1.5 times more volatile than Shanghai Pharmaceuticals Holding. It trades about 0.26 of its potential returns per unit of risk. Shanghai Pharmaceuticals Holding is currently generating about 0.11 per unit of risk. If you would invest 760.00 in Luolai Home Textile on September 13, 2024 and sell it today you would earn a total of 102.00 from holding Luolai Home Textile or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Luolai Home Textile vs. Shanghai Pharmaceuticals Holdi
Performance |
| Timeline |
| Luolai Home Textile |
| Shanghai Pharmaceuticals |
Luolai Home and Shanghai Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Shanghai Pharmaceuticals
The main advantage of trading using opposite Luolai Home and Shanghai Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals will offset losses from the drop in Shanghai Pharmaceuticals' long position.| Luolai Home vs. Nanjing Putian Telecommunications | Luolai Home vs. Tianjin Realty Development | Luolai Home vs. Kangyue Technology Co | Luolai Home vs. Shenzhen Hifuture Electric |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |