Correlation Between Luolai Home and AUPU Home
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By analyzing existing cross correlation between Luolai Home Textile and AUPU Home Style, you can compare the effects of market volatilities on Luolai Home and AUPU Home 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 AUPU Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and AUPU Home.
Diversification Opportunities for Luolai Home and AUPU Home
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luolai and AUPU is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and AUPU Home Style in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUPU Home Style 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 AUPU Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUPU Home Style has no effect on the direction of Luolai Home i.e., Luolai Home and AUPU Home go up and down completely randomly.
Pair Corralation between Luolai Home and AUPU Home
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.07 times more return on investment than AUPU Home. However, Luolai Home is 1.07 times more volatile than AUPU Home Style. It trades about 0.04 of its potential returns per unit of risk. AUPU Home Style is currently generating about 0.03 per unit of risk. If you would invest 813.00 in Luolai Home Textile on September 3, 2024 and sell it today you would earn a total of 54.00 from holding Luolai Home Textile or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. AUPU Home Style
Performance |
| Timeline |
| Luolai Home Textile |
| AUPU Home Style |
Luolai Home and AUPU Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and AUPU Home
The main advantage of trading using opposite Luolai Home and AUPU Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, AUPU Home 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 AUPU Home will offset losses from the drop in AUPU Home's long position.| Luolai Home vs. PetroChina Co Ltd | Luolai Home vs. China Mobile Limited | Luolai Home vs. Industrial and Commercial | Luolai Home vs. China Life Insurance |
| AUPU Home vs. PetroChina Co Ltd | AUPU Home vs. China Mobile Limited | AUPU Home vs. Industrial and Commercial | AUPU Home vs. China Life Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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