Correlation Between Shandong Iron and Luyin Investment
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By analyzing existing cross correlation between Shandong Iron and and Luyin Investment Group, you can compare the effects of market volatilities on Shandong Iron and Luyin Investment 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 Shandong Iron with a short position of Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Iron and Luyin Investment.
Diversification Opportunities for Shandong Iron and Luyin Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Luyin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Iron and and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment and Shandong Iron 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 Shandong Iron and are associated (or correlated) with Luyin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luyin Investment has no effect on the direction of Shandong Iron i.e., Shandong Iron and Luyin Investment go up and down completely randomly.
Pair Corralation between Shandong Iron and Luyin Investment
Assuming the 90 days trading horizon Shandong Iron and is expected to under-perform the Luyin Investment. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Iron and is 1.17 times less risky than Luyin Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Luyin Investment Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 642.00 in Luyin Investment Group on October 13, 2024 and sell it today you would lose (91.00) from holding Luyin Investment Group or give up 14.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Iron and vs. Luyin Investment Group
Performance |
| Timeline |
| Shandong Iron |
| Luyin Investment |
Shandong Iron and Luyin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Iron and Luyin Investment
The main advantage of trading using opposite Shandong Iron and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Iron position performs unexpectedly, Luyin Investment 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 Luyin Investment will offset losses from the drop in Luyin Investment's long position.| Shandong Iron vs. Shantui Construction Machinery | Shandong Iron vs. Shaanxi Construction Machinery | Shandong Iron vs. Weichai Heavy Machinery | Shandong Iron vs. Sinomach General Machinery |
| Luyin Investment vs. Gansu Jiu Steel | Luyin Investment vs. Baoshan Iron Steel | Luyin Investment vs. Jiangsu Xinri E Vehicle | Luyin Investment vs. Shandong Iron and |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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