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
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Lutian is -0.45. 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 is expected to generate 4.07 times less return on investment than Lutian Machinery. But when comparing it to its historical volatility, China Petroleum Chemical is 2.56 times less risky than Lutian Machinery. It trades about 0.08 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,487 in Lutian Machinery Co on September 2, 2024 and sell it today you would earn a total of 76.00 from holding Lutian Machinery Co or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| 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. Vohringer Home Technology | China Petroleum vs. Xinjiang Baodi Mining | China Petroleum vs. Xiamen Goldenhome Co | China Petroleum vs. Jinhui Mining Co |
| Lutian Machinery vs. Hangzhou Gaoxin Rubber | Lutian Machinery vs. Chengtun Mining Group | Lutian Machinery vs. Eastern Air Logistics | Lutian Machinery vs. Suzhou Xingye Material |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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