Correlation Between Guangzhou Jointas and Lutian Machinery
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and Lutian Machinery Co, you can compare the effects of market volatilities on Guangzhou Jointas 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 Guangzhou Jointas with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and Lutian Machinery.
Diversification Opportunities for Guangzhou Jointas and Lutian Machinery
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Lutian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas 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 Guangzhou Jointas 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 Guangzhou Jointas 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 Guangzhou Jointas i.e., Guangzhou Jointas and Lutian Machinery go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and Lutian Machinery
Assuming the 90 days trading horizon Guangzhou Jointas Chemical is expected to under-perform the Lutian Machinery. In addition to that, Guangzhou Jointas is 1.79 times more volatile than Lutian Machinery Co. It trades about -0.32 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.15 per unit of volatility. If you would invest 1,590 in Lutian Machinery Co on October 12, 2024 and sell it today you would lose (86.00) from holding Lutian Machinery Co or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Jointas Chemical vs. Lutian Machinery Co
Performance |
| Timeline |
| Guangzhou Jointas |
| Lutian Machinery |
Guangzhou Jointas and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and Lutian Machinery
The main advantage of trading using opposite Guangzhou Jointas and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas 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.| Guangzhou Jointas vs. Qumei Furniture Group | Guangzhou Jointas vs. Songz Automobile Air | Guangzhou Jointas vs. Zoy Home Furnishing | Guangzhou Jointas vs. Ningbo Fangzheng Automobile |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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