Correlation Between Linzhou Heavy and SI TECH
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By analyzing existing cross correlation between Linzhou Heavy Machinery and SI TECH Information Technology, you can compare the effects of market volatilities on Linzhou Heavy and SI TECH 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 Linzhou Heavy with a short position of SI TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and SI TECH.
Diversification Opportunities for Linzhou Heavy and SI TECH
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and 300608 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and SI TECH Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SI TECH Information and Linzhou Heavy 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 Linzhou Heavy Machinery are associated (or correlated) with SI TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SI TECH Information has no effect on the direction of Linzhou Heavy i.e., Linzhou Heavy and SI TECH go up and down completely randomly.
Pair Corralation between Linzhou Heavy and SI TECH
Assuming the 90 days trading horizon Linzhou Heavy Machinery is expected to under-perform the SI TECH. But the stock apears to be less risky and, when comparing its historical volatility, Linzhou Heavy Machinery is 2.53 times less risky than SI TECH. The stock trades about -0.04 of its potential returns per unit of risk. The SI TECH Information Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,143 in SI TECH Information Technology on October 30, 2024 and sell it today you would earn a total of 87.00 from holding SI TECH Information Technology or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. SI TECH Information Technology
Performance |
| Timeline |
| Linzhou Heavy Machinery |
| SI TECH Information |
Linzhou Heavy and SI TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linzhou Heavy and SI TECH
The main advantage of trading using opposite Linzhou Heavy and SI TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy position performs unexpectedly, SI TECH 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 SI TECH will offset losses from the drop in SI TECH's long position.| Linzhou Heavy vs. Jinhe Biotechnology Co | Linzhou Heavy vs. Agricultural Bank of | Linzhou Heavy vs. Guangzhou KDT Machinery | Linzhou Heavy vs. Guangdong Marubi Biotechnology |
| SI TECH vs. Sino Platinum Metals Co | SI TECH vs. Anhui Transport Consulting | SI TECH vs. Jiangsu Jinling Sports | SI TECH vs. Chongqing Shunbo Aluminum |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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