Correlation Between Guangzhou Shangpin and Lutian Machinery
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By analyzing existing cross correlation between Guangzhou Shangpin Home and Lutian Machinery Co, you can compare the effects of market volatilities on Guangzhou Shangpin 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 Guangzhou Shangpin with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Shangpin and Lutian Machinery.
Diversification Opportunities for Guangzhou Shangpin and Lutian Machinery
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Lutian is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Shangpin Home and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Guangzhou Shangpin 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 Guangzhou Shangpin Home 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 Guangzhou Shangpin i.e., Guangzhou Shangpin and Lutian Machinery go up and down completely randomly.
Pair Corralation between Guangzhou Shangpin and Lutian Machinery
Assuming the 90 days trading horizon Guangzhou Shangpin Home is expected to generate 1.37 times more return on investment than Lutian Machinery. However, Guangzhou Shangpin is 1.37 times more volatile than Lutian Machinery Co. It trades about 0.12 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.09 per unit of risk. If you would invest 1,424 in Guangzhou Shangpin Home on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Guangzhou Shangpin Home or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Shangpin Home vs. Lutian Machinery Co
Performance |
| Timeline |
| Guangzhou Shangpin Home |
| Lutian Machinery |
Guangzhou Shangpin and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Shangpin and Lutian Machinery
The main advantage of trading using opposite Guangzhou Shangpin and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Shangpin 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.| Guangzhou Shangpin vs. Lutian Machinery Co | Guangzhou Shangpin vs. China Longyuan Power | Guangzhou Shangpin vs. PetroChina Co Ltd | Guangzhou Shangpin vs. Bank of China |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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