Correlation Between Tianjin Pengling and Luzhou Lao
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By analyzing existing cross correlation between Tianjin Pengling Rubber and Luzhou Lao Jiao, you can compare the effects of market volatilities on Tianjin Pengling and Luzhou Lao 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 Tianjin Pengling with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Pengling and Luzhou Lao.
Diversification Opportunities for Tianjin Pengling and Luzhou Lao
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Luzhou is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Pengling Rubber and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Tianjin Pengling 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 Tianjin Pengling Rubber are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Tianjin Pengling i.e., Tianjin Pengling and Luzhou Lao go up and down completely randomly.
Pair Corralation between Tianjin Pengling and Luzhou Lao
Assuming the 90 days trading horizon Tianjin Pengling Rubber is expected to generate 1.81 times more return on investment than Luzhou Lao. However, Tianjin Pengling is 1.81 times more volatile than Luzhou Lao Jiao. It trades about -0.08 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.14 per unit of risk. If you would invest 551.00 in Tianjin Pengling Rubber on September 12, 2024 and sell it today you would lose (26.00) from holding Tianjin Pengling Rubber or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Pengling Rubber vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Tianjin Pengling Rubber |
| Luzhou Lao Jiao |
Tianjin Pengling and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Pengling and Luzhou Lao
The main advantage of trading using opposite Tianjin Pengling and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Pengling position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Tianjin Pengling vs. Lutian Machinery Co | Tianjin Pengling vs. PetroChina Co Ltd | Tianjin Pengling vs. Bank of China | Tianjin Pengling vs. Gansu Jiu Steel |
| Luzhou Lao vs. Nuode Investment Co | Luzhou Lao vs. Shenzhen Centralcon Investment | Luzhou Lao vs. Anhui Gujing Distillery | Luzhou Lao vs. Gansu Huangtai Wine marketing |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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