Correlation Between Guizhou Chanhen and Lutian Machinery
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Lutian Machinery Co, you can compare the effects of market volatilities on Guizhou Chanhen 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 Guizhou Chanhen with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Lutian Machinery.
Diversification Opportunities for Guizhou Chanhen and Lutian Machinery
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guizhou and Lutian is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Guizhou Chanhen 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 Guizhou Chanhen Chemical 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 Guizhou Chanhen i.e., Guizhou Chanhen and Lutian Machinery go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Lutian Machinery
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to generate 1.37 times more return on investment than Lutian Machinery. However, Guizhou Chanhen is 1.37 times more volatile than Lutian Machinery Co. It trades about -0.05 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.15 per unit of risk. If you would invest 2,221 in Guizhou Chanhen Chemical on October 12, 2024 and sell it today you would lose (61.00) from holding Guizhou Chanhen Chemical or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Lutian Machinery Co
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Lutian Machinery |
Guizhou Chanhen and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Lutian Machinery
The main advantage of trading using opposite Guizhou Chanhen and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen 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.| Guizhou Chanhen vs. Fibocom Wireless | Guizhou Chanhen vs. Haima Automobile Group | Guizhou Chanhen vs. Huaxia Fund Management | Guizhou Chanhen vs. Allwin Telecommunication Co |
| Lutian Machinery vs. Xiamen Jihong Package | Lutian Machinery vs. Youyou Foods Co | Lutian Machinery vs. Jinhui Liquor Co | Lutian Machinery vs. Zhangjiagang Freetrade Science |
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 CEOs Directory module to screen CEOs from public companies around the world.
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