Correlation Between Lushang Property and Hunan Investment
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By analyzing existing cross correlation between Lushang Property Co and Hunan Investment Group, you can compare the effects of market volatilities on Lushang Property and Hunan 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 Lushang Property with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lushang Property and Hunan Investment.
Diversification Opportunities for Lushang Property and Hunan Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lushang and Hunan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lushang Property Co and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Lushang Property 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 Lushang Property Co are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Lushang Property i.e., Lushang Property and Hunan Investment go up and down completely randomly.
Pair Corralation between Lushang Property and Hunan Investment
Assuming the 90 days trading horizon Lushang Property Co is expected to under-perform the Hunan Investment. But the stock apears to be less risky and, when comparing its historical volatility, Lushang Property Co is 1.09 times less risky than Hunan Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Hunan Investment Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Hunan Investment Group on September 1, 2024 and sell it today you would earn a total of 159.00 from holding Hunan Investment Group or generate 38.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.45% |
| Values | Daily Returns |
Lushang Property Co vs. Hunan Investment Group
Performance |
| Timeline |
| Lushang Property |
| Hunan Investment |
Lushang Property and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lushang Property and Hunan Investment
The main advantage of trading using opposite Lushang Property and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lushang Property position performs unexpectedly, Hunan 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Lushang Property vs. Sinofibers Technology Co | Lushang Property vs. Saurer Intelligent Technology | Lushang Property vs. Air China Ltd | Lushang Property vs. HUAQIN TECHNOLOGY LTD |
| Hunan Investment vs. Jiangsu Phoenix Publishing | Hunan Investment vs. Union Semiconductor Co | Hunan Investment vs. China Publishing Media | Hunan Investment vs. GigaDevice SemiconductorBeiji |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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