Correlation Between Rising Nonferrous and Lutian Machinery
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By analyzing existing cross correlation between Rising Nonferrous Metals and Lutian Machinery Co, you can compare the effects of market volatilities on Rising Nonferrous 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 Rising Nonferrous with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Lutian Machinery.
Diversification Opportunities for Rising Nonferrous and Lutian Machinery
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rising and Lutian is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Rising Nonferrous 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 Rising Nonferrous Metals 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 Rising Nonferrous i.e., Rising Nonferrous and Lutian Machinery go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Lutian Machinery
Assuming the 90 days trading horizon Rising Nonferrous Metals is expected to generate 1.81 times more return on investment than Lutian Machinery. However, Rising Nonferrous is 1.81 times more volatile than Lutian Machinery Co. It trades about 0.05 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.03 per unit of risk. If you would invest 2,858 in Rising Nonferrous Metals on October 28, 2024 and sell it today you would earn a total of 62.00 from holding Rising Nonferrous Metals or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Lutian Machinery Co
Performance |
| Timeline |
| Rising Nonferrous Metals |
| Lutian Machinery |
Rising Nonferrous and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Lutian Machinery
The main advantage of trading using opposite Rising Nonferrous and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous 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.| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Wanhua Chemical Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Shandong Gold Mining |
| Lutian Machinery vs. HUAQIN TECHNOLOGY LTD | Lutian Machinery vs. Sharetronic Data Technology | Lutian Machinery vs. Holitech Technology Co | Lutian Machinery vs. Wintao Communications Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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