Correlation Between Luolai Home and Zoy Home
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By analyzing existing cross correlation between Luolai Home Textile and Zoy Home Furnishing, you can compare the effects of market volatilities on Luolai Home and Zoy 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 Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Zoy Home.
Diversification Opportunities for Luolai Home and Zoy Home
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Luolai and Zoy is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing 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 Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of Luolai Home i.e., Luolai Home and Zoy Home go up and down completely randomly.
Pair Corralation between Luolai Home and Zoy Home
Assuming the 90 days trading horizon Luolai Home Textile is expected to under-perform the Zoy Home. But the stock apears to be less risky and, when comparing its historical volatility, Luolai Home Textile is 1.87 times less risky than Zoy Home. The stock trades about -0.01 of its potential returns per unit of risk. The Zoy Home Furnishing is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,388 in Zoy Home Furnishing on September 5, 2024 and sell it today you would lose (231.00) from holding Zoy Home Furnishing or give up 16.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Zoy Home Furnishing
Performance |
| Timeline |
| Luolai Home Textile |
| Zoy Home Furnishing |
Luolai Home and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Zoy Home
The main advantage of trading using opposite Luolai Home and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Zoy 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 Zoy Home will offset losses from the drop in Zoy Home's long position.| Luolai Home vs. Industrial and Commercial | Luolai Home vs. China Construction Bank | Luolai Home vs. Agricultural Bank of | Luolai Home vs. Bank of China |
| Zoy Home vs. Industrial and Commercial | Zoy Home vs. Agricultural Bank of | Zoy Home vs. China Construction Bank | Zoy Home vs. Bank of China |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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