Correlation Between Allmed Medical and Luxi Chemical
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By analyzing existing cross correlation between Allmed Medical Products and Luxi Chemical Group, you can compare the effects of market volatilities on Allmed Medical and Luxi Chemical 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 Allmed Medical with a short position of Luxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allmed Medical and Luxi Chemical.
Diversification Opportunities for Allmed Medical and Luxi Chemical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allmed and Luxi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Allmed Medical Products and Luxi Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxi Chemical Group and Allmed Medical 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 Allmed Medical Products are associated (or correlated) with Luxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxi Chemical Group has no effect on the direction of Allmed Medical i.e., Allmed Medical and Luxi Chemical go up and down completely randomly.
Pair Corralation between Allmed Medical and Luxi Chemical
Assuming the 90 days trading horizon Allmed Medical Products is expected to generate 1.81 times more return on investment than Luxi Chemical. However, Allmed Medical is 1.81 times more volatile than Luxi Chemical Group. It trades about 0.07 of its potential returns per unit of risk. Luxi Chemical Group is currently generating about -0.06 per unit of risk. If you would invest 872.00 in Allmed Medical Products on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Allmed Medical Products or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allmed Medical Products vs. Luxi Chemical Group
Performance |
| Timeline |
| Allmed Medical Products |
| Luxi Chemical Group |
Allmed Medical and Luxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allmed Medical and Luxi Chemical
The main advantage of trading using opposite Allmed Medical and Luxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allmed Medical position performs unexpectedly, Luxi Chemical 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 Luxi Chemical will offset losses from the drop in Luxi Chemical's long position.| Allmed Medical vs. Industrial and Commercial | Allmed Medical vs. China Construction Bank | Allmed Medical vs. Agricultural Bank of | Allmed Medical vs. Bank of China |
| Luxi Chemical vs. Nanjing Medlander Medical | Luxi Chemical vs. Allmed Medical Products | Luxi Chemical vs. Touchstone International Medical | Luxi Chemical vs. Xingguang Agricultural Mach |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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