Correlation Between COL Digital and Lutian Machinery
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By analyzing existing cross correlation between COL Digital Publishing and Lutian Machinery Co, you can compare the effects of market volatilities on COL Digital 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 COL Digital with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Digital and Lutian Machinery.
Diversification Opportunities for COL Digital and Lutian Machinery
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between COL and Lutian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding COL Digital Publishing and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and COL Digital 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 COL Digital Publishing 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 COL Digital i.e., COL Digital and Lutian Machinery go up and down completely randomly.
Pair Corralation between COL Digital and Lutian Machinery
Assuming the 90 days trading horizon COL Digital Publishing is expected to generate 2.21 times more return on investment than Lutian Machinery. However, COL Digital is 2.21 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 0.02 per unit of risk. If you would invest 3,340 in COL Digital Publishing on September 4, 2024 and sell it today you would lose (391.00) from holding COL Digital Publishing or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
COL Digital Publishing vs. Lutian Machinery Co
Performance |
| Timeline |
| COL Digital Publishing |
| Lutian Machinery |
COL Digital and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Digital and Lutian Machinery
The main advantage of trading using opposite COL Digital and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Digital 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.| COL Digital vs. Lutian Machinery Co | COL Digital vs. China Longyuan Power | COL Digital vs. PetroChina Co Ltd | COL Digital vs. Bank of China |
| Lutian Machinery vs. Chengdu Kanghua Biological | Lutian Machinery vs. Beijing Wantai Biological | Lutian Machinery vs. Suzhou Novoprotein Scientific | Lutian Machinery vs. Aluminum Corp of |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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