Correlation Between Luolai Home and Eastroc Beverage
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By analyzing existing cross correlation between Luolai Home Textile and Eastroc Beverage Group, you can compare the effects of market volatilities on Luolai Home and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Eastroc Beverage.
Diversification Opportunities for Luolai Home and Eastroc Beverage
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luolai and Eastroc is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Luolai Home i.e., Luolai Home and Eastroc Beverage go up and down completely randomly.
Pair Corralation between Luolai Home and Eastroc Beverage
Assuming the 90 days trading horizon Luolai Home Textile is expected to under-perform the Eastroc Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Luolai Home Textile is 1.09 times less risky than Eastroc Beverage. The stock trades about -0.03 of its potential returns per unit of risk. The Eastroc Beverage Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,220 in Eastroc Beverage Group on October 14, 2024 and sell it today you would earn a total of 14,476 from holding Eastroc Beverage Group or generate 109.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Eastroc Beverage Group
Performance |
| Timeline |
| Luolai Home Textile |
| Eastroc Beverage |
Luolai Home and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Eastroc Beverage
The main advantage of trading using opposite Luolai Home and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.| Luolai Home vs. State Grid InformationCommunication | Luolai Home vs. Eastroc Beverage Group | Luolai Home vs. Ligao Foods CoLtd | Luolai Home vs. Sunwave Communications Co |
| Eastroc Beverage vs. Hunan Mendale Hometextile | Eastroc Beverage vs. Qumei Furniture Group | Eastroc Beverage vs. DO Home Collection | Eastroc Beverage vs. Luolai Home Textile |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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