Correlation Between Luolai Home and Dazhong Transportation
Specify exactly 2 symbols:
By analyzing existing cross correlation between Luolai Home Textile and Dazhong Transportation Group, you can compare the effects of market volatilities on Luolai Home and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Dazhong Transportation.
Diversification Opportunities for Luolai Home and Dazhong Transportation
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luolai and Dazhong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Luolai Home i.e., Luolai Home and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Luolai Home and Dazhong Transportation
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 1.32 times more return on investment than Dazhong Transportation. However, Luolai Home is 1.32 times more volatile than Dazhong Transportation Group. It trades about 0.31 of its potential returns per unit of risk. Dazhong Transportation Group is currently generating about -0.08 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 135.00 from holding Luolai Home Textile or generate 17.76% 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. Dazhong Transportation Group
Performance |
| Timeline |
| Luolai Home Textile |
| Dazhong Transportation |
Luolai Home and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Dazhong Transportation
The main advantage of trading using opposite Luolai Home and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |