Correlation Between China Petroleum and Lutian Machinery
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By analyzing existing cross correlation between China Petroleum Chemical and Lutian Machinery Co, you can compare the effects of market volatilities on China Petroleum 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 China Petroleum with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Lutian Machinery.
Diversification Opportunities for China Petroleum and Lutian Machinery
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Lutian is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and China Petroleum 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 China Petroleum Chemical 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 China Petroleum i.e., China Petroleum and Lutian Machinery go up and down completely randomly.
Pair Corralation between China Petroleum and Lutian Machinery
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Lutian Machinery. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.41 times less risky than Lutian Machinery. The stock trades about -0.09 of its potential returns per unit of risk. The Lutian Machinery Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,570 in Lutian Machinery Co on October 26, 2024 and sell it today you would lose (12.00) from holding Lutian Machinery Co or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Lutian Machinery Co
Performance |
| Timeline |
| China Petroleum Chemical |
| Lutian Machinery |
China Petroleum and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Lutian Machinery
The main advantage of trading using opposite China Petroleum and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum 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.| China Petroleum vs. JuneYao Dairy Co | China Petroleum vs. Everjoy Health Group | China Petroleum vs. Jiahe Foods Industry | China Petroleum vs. Meinian Onehealth Healthcare |
| Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. China Construction Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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