Correlation Between Luolai Home and Shanghai Shuixing
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By analyzing existing cross correlation between Luolai Home Textile and Shanghai Shuixing Home, you can compare the effects of market volatilities on Luolai Home and Shanghai Shuixing 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 Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Shanghai Shuixing.
Diversification Opportunities for Luolai Home and Shanghai Shuixing
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luolai and Shanghai is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home 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 Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Luolai Home i.e., Luolai Home and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Luolai Home and Shanghai Shuixing
Assuming the 90 days trading horizon Luolai Home is expected to generate 1.62 times less return on investment than Shanghai Shuixing. But when comparing it to its historical volatility, Luolai Home Textile is 1.35 times less risky than Shanghai Shuixing. It trades about 0.06 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,516 in Shanghai Shuixing Home on November 27, 2024 and sell it today you would earn a total of 26.00 from holding Shanghai Shuixing Home or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Luolai Home Textile |
| Shanghai Shuixing Home |
Luolai Home and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Shanghai Shuixing
The main advantage of trading using opposite Luolai Home and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Shanghai Shuixing 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 Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Luolai Home vs. Nancal Energy Saving Tech | Luolai Home vs. Inspur Software Co | Luolai Home vs. Bank of Suzhou | Luolai Home vs. Financial Street Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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