Correlation Between Leyard Optoelectronic and Shantui Construction
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By analyzing existing cross correlation between Leyard Optoelectronic and Shantui Construction Machinery, you can compare the effects of market volatilities on Leyard Optoelectronic and Shantui Construction 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 Leyard Optoelectronic with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyard Optoelectronic and Shantui Construction.
Diversification Opportunities for Leyard Optoelectronic and Shantui Construction
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leyard and Shantui is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Leyard Optoelectronic and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Leyard Optoelectronic 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 Leyard Optoelectronic are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Leyard Optoelectronic i.e., Leyard Optoelectronic and Shantui Construction go up and down completely randomly.
Pair Corralation between Leyard Optoelectronic and Shantui Construction
Assuming the 90 days trading horizon Leyard Optoelectronic is expected to generate 0.87 times more return on investment than Shantui Construction. However, Leyard Optoelectronic is 1.15 times less risky than Shantui Construction. It trades about 0.2 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.14 per unit of risk. If you would invest 516.00 in Leyard Optoelectronic on September 5, 2024 and sell it today you would earn a total of 63.00 from holding Leyard Optoelectronic or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leyard Optoelectronic vs. Shantui Construction Machinery
Performance |
| Timeline |
| Leyard Optoelectronic |
| Shantui Construction |
Leyard Optoelectronic and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyard Optoelectronic and Shantui Construction
The main advantage of trading using opposite Leyard Optoelectronic and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyard Optoelectronic position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Leyard Optoelectronic vs. PetroChina Co Ltd | Leyard Optoelectronic vs. China Mobile Limited | Leyard Optoelectronic vs. CNOOC Limited | Leyard Optoelectronic vs. Ping An Insurance |
| Shantui Construction vs. Qtone Education Group | Shantui Construction vs. Leyard Optoelectronic | Shantui Construction vs. TongFu Microelectronics Co | Shantui Construction vs. Kunshan Guoli Electronic |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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