Correlation Between Jinhe Biotechnology and Lutian Machinery
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Lutian Machinery Co, you can compare the effects of market volatilities on Jinhe Biotechnology 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 Jinhe Biotechnology with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Lutian Machinery.
Diversification Opportunities for Jinhe Biotechnology and Lutian Machinery
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinhe and Lutian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Jinhe Biotechnology 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 Jinhe Biotechnology Co 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 Jinhe Biotechnology i.e., Jinhe Biotechnology and Lutian Machinery go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Lutian Machinery
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to under-perform the Lutian Machinery. In addition to that, Jinhe Biotechnology is 1.06 times more volatile than Lutian Machinery Co. It trades about -0.02 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.01 per unit of volatility. If you would invest 1,852 in Lutian Machinery Co on October 13, 2024 and sell it today you would lose (352.00) from holding Lutian Machinery Co or give up 19.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Lutian Machinery Co
Performance |
| Timeline |
| Jinhe Biotechnology |
| Lutian Machinery |
Jinhe Biotechnology and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Lutian Machinery
The main advantage of trading using opposite Jinhe Biotechnology and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology 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.| Jinhe Biotechnology vs. Beijing Mainstreets Investment | Jinhe Biotechnology vs. Hainan Haiqi Transportation | Jinhe Biotechnology vs. Nuode Investment Co | Jinhe Biotechnology vs. Chengdu Xingrong Investment |
| Lutian Machinery vs. Longjian Road Bridge | Lutian Machinery vs. Anshan Senyuan Road | Lutian Machinery vs. Jinhe Biotechnology Co | Lutian Machinery vs. Sichuan Hebang Biotechnology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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