Correlation Between Ningbo GQY and Lutian Machinery
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By analyzing existing cross correlation between Ningbo GQY Video and Lutian Machinery Co, you can compare the effects of market volatilities on Ningbo GQY 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 Ningbo GQY with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo GQY and Lutian Machinery.
Diversification Opportunities for Ningbo GQY and Lutian Machinery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Lutian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo GQY Video and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Ningbo GQY 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 Ningbo GQY Video 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 Ningbo GQY i.e., Ningbo GQY and Lutian Machinery go up and down completely randomly.
Pair Corralation between Ningbo GQY and Lutian Machinery
Assuming the 90 days trading horizon Ningbo GQY Video is expected to generate 1.96 times more return on investment than Lutian Machinery. However, Ningbo GQY is 1.96 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 -0.01 per unit of risk. If you would invest 503.00 in Ningbo GQY Video on September 12, 2024 and sell it today you would earn a total of 299.00 from holding Ningbo GQY Video or generate 59.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo GQY Video vs. Lutian Machinery Co
Performance |
| Timeline |
| Ningbo GQY Video |
| Lutian Machinery |
Ningbo GQY and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo GQY and Lutian Machinery
The main advantage of trading using opposite Ningbo GQY and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo GQY 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.| Ningbo GQY vs. Gansu Jiu Steel | Ningbo GQY vs. Shandong Mining Machinery | Ningbo GQY vs. Aba Chemicals Corp | Ningbo GQY vs. BlueFocus Communication Group |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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