Correlation Between Tianjin Pengling and Lutian Machinery
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By analyzing existing cross correlation between Tianjin Pengling Rubber and Lutian Machinery Co, you can compare the effects of market volatilities on Tianjin Pengling 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 Tianjin Pengling with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Pengling and Lutian Machinery.
Diversification Opportunities for Tianjin Pengling and Lutian Machinery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Lutian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Pengling Rubber and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery 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 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 Tianjin Pengling i.e., Tianjin Pengling and Lutian Machinery go up and down completely randomly.
Pair Corralation between Tianjin Pengling and Lutian Machinery
Assuming the 90 days trading horizon Tianjin Pengling Rubber is expected to generate 1.54 times more return on investment than Lutian Machinery. However, Tianjin Pengling is 1.54 times more volatile than Lutian Machinery Co. It trades about 0.17 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.2 per unit of risk. If you would invest 383.00 in Tianjin Pengling Rubber on September 13, 2024 and sell it today you would earn a total of 149.00 from holding Tianjin Pengling Rubber or generate 38.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Pengling Rubber vs. Lutian Machinery Co
Performance |
| Timeline |
| Tianjin Pengling Rubber |
| Lutian Machinery |
Tianjin Pengling and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Pengling and Lutian Machinery
The main advantage of trading using opposite Tianjin Pengling and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Pengling 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.| Tianjin Pengling vs. Chison Medical Technologies | Tianjin Pengling vs. Double Medical Technology | Tianjin Pengling vs. Jinhui Liquor Co | Tianjin Pengling vs. Zhejiang Publishing Media |
| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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