Correlation Between Sino Wealth and Lutian Machinery
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By analyzing existing cross correlation between Sino Wealth Electronic and Lutian Machinery Co, you can compare the effects of market volatilities on Sino Wealth 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 Sino Wealth with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Wealth and Lutian Machinery.
Diversification Opportunities for Sino Wealth and Lutian Machinery
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sino and Lutian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sino Wealth Electronic and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Sino Wealth 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 Sino Wealth Electronic 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 Sino Wealth i.e., Sino Wealth and Lutian Machinery go up and down completely randomly.
Pair Corralation between Sino Wealth and Lutian Machinery
Assuming the 90 days trading horizon Sino Wealth Electronic is expected to generate 1.6 times more return on investment than Lutian Machinery. However, Sino Wealth is 1.6 times more volatile than Lutian Machinery Co. It trades about 0.02 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.0 per unit of risk. If you would invest 2,453 in Sino Wealth Electronic on August 29, 2024 and sell it today you would lose (30.00) from holding Sino Wealth Electronic or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Wealth Electronic vs. Lutian Machinery Co
Performance |
| Timeline |
| Sino Wealth Electronic |
| Lutian Machinery |
Sino Wealth and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Wealth and Lutian Machinery
The main advantage of trading using opposite Sino Wealth and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Wealth 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.| Sino Wealth vs. Lutian Machinery Co | Sino Wealth vs. China Longyuan Power | Sino Wealth vs. Changshu Tongrun Auto | Sino Wealth vs. PetroChina Co Ltd |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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