Correlation Between Jiajia Food and Lutian Machinery
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By analyzing existing cross correlation between Jiajia Food Group and Lutian Machinery Co, you can compare the effects of market volatilities on Jiajia Food and Lutian Machinery 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 Jiajia Food with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiajia Food and Lutian Machinery.
Diversification Opportunities for Jiajia Food and Lutian Machinery
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiajia and Lutian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jiajia Food Group and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Jiajia Food 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 Jiajia Food Group are associated (or correlated) with Lutian Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lutian Machinery has no effect on the direction of Jiajia Food i.e., Jiajia Food and Lutian Machinery go up and down completely randomly.
Pair Corralation between Jiajia Food and Lutian Machinery
Assuming the 90 days trading horizon Jiajia Food Group is expected to generate 1.69 times more return on investment than Lutian Machinery. However, Jiajia Food is 1.69 times more volatile than Lutian Machinery Co. It trades about 0.3 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.14 per unit of risk. If you would invest 337.00 in Jiajia Food Group on August 31, 2024 and sell it today you would earn a total of 106.00 from holding Jiajia Food Group or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiajia Food Group vs. Lutian Machinery Co
Performance |
| Timeline |
| Jiajia Food Group |
| Lutian Machinery |
Jiajia Food and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiajia Food and Lutian Machinery
The main advantage of trading using opposite Jiajia Food and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiajia Food position performs unexpectedly, Lutian Machinery 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 Lutian Machinery will offset losses from the drop in Lutian Machinery's long position.| Jiajia Food vs. Lutian Machinery Co | Jiajia Food vs. PetroChina Co Ltd | Jiajia Food vs. Bank of China | Jiajia Food vs. Gansu Jiu Steel |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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