Correlation Between Guangxi Guiguan and Lutian Machinery
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By analyzing existing cross correlation between Guangxi Guiguan Electric and Lutian Machinery Co, you can compare the effects of market volatilities on Guangxi Guiguan 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 Guangxi Guiguan with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Guiguan and Lutian Machinery.
Diversification Opportunities for Guangxi Guiguan and Lutian Machinery
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangxi and Lutian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Guiguan Electric and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Guangxi Guiguan 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 Guangxi Guiguan Electric 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 Guangxi Guiguan i.e., Guangxi Guiguan and Lutian Machinery go up and down completely randomly.
Pair Corralation between Guangxi Guiguan and Lutian Machinery
Assuming the 90 days trading horizon Guangxi Guiguan Electric is expected to under-perform the Lutian Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Guangxi Guiguan Electric is 1.15 times less risky than Lutian Machinery. The stock trades about -0.05 of its potential returns per unit of risk. The Lutian Machinery Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,481 in Lutian Machinery Co on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Lutian Machinery Co or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Guiguan Electric vs. Lutian Machinery Co
Performance |
| Timeline |
| Guangxi Guiguan Electric |
| Lutian Machinery |
Guangxi Guiguan and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Guiguan and Lutian Machinery
The main advantage of trading using opposite Guangxi Guiguan and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Guiguan 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.| Guangxi Guiguan vs. BYD Co Ltd | Guangxi Guiguan vs. China Mobile Limited | Guangxi Guiguan vs. Agricultural Bank of | Guangxi Guiguan vs. Industrial and Commercial |
| Lutian Machinery vs. Biwin Storage Technology | Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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