Correlation Between Masterwork Machinery and Luyin Investment
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By analyzing existing cross correlation between Masterwork Machinery and Luyin Investment Group, you can compare the effects of market volatilities on Masterwork Machinery and Luyin Investment 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 Masterwork Machinery with a short position of Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masterwork Machinery and Luyin Investment.
Diversification Opportunities for Masterwork Machinery and Luyin Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Masterwork and Luyin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Masterwork Machinery and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment and Masterwork Machinery 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 Masterwork Machinery are associated (or correlated) with Luyin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luyin Investment has no effect on the direction of Masterwork Machinery i.e., Masterwork Machinery and Luyin Investment go up and down completely randomly.
Pair Corralation between Masterwork Machinery and Luyin Investment
Assuming the 90 days trading horizon Masterwork Machinery is expected to under-perform the Luyin Investment. In addition to that, Masterwork Machinery is 1.66 times more volatile than Luyin Investment Group. It trades about -0.51 of its total potential returns per unit of risk. Luyin Investment Group is currently generating about -0.45 per unit of volatility. If you would invest 652.00 in Luyin Investment Group on October 13, 2024 and sell it today you would lose (101.00) from holding Luyin Investment Group or give up 15.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Masterwork Machinery vs. Luyin Investment Group
Performance |
| Timeline |
| Masterwork Machinery |
| Luyin Investment |
Masterwork Machinery and Luyin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masterwork Machinery and Luyin Investment
The main advantage of trading using opposite Masterwork Machinery and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masterwork Machinery position performs unexpectedly, Luyin Investment 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 Luyin Investment will offset losses from the drop in Luyin Investment's long position.The idea behind Masterwork Machinery and Luyin Investment Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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