Correlation Between Tengda Construction and Lutian Machinery
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By analyzing existing cross correlation between Tengda Construction Group and Lutian Machinery Co, you can compare the effects of market volatilities on Tengda Construction 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 Tengda Construction with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Lutian Machinery.
Diversification Opportunities for Tengda Construction and Lutian Machinery
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tengda and Lutian is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Tengda Construction 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 Tengda Construction Group 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 Tengda Construction i.e., Tengda Construction and Lutian Machinery go up and down completely randomly.
Pair Corralation between Tengda Construction and Lutian Machinery
Assuming the 90 days trading horizon Tengda Construction Group is expected to under-perform the Lutian Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Tengda Construction Group is 1.17 times less risky than Lutian Machinery. The stock trades about 0.0 of its potential returns per unit of risk. The Lutian Machinery Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,564 in Lutian Machinery Co on September 4, 2024 and sell it today you would earn a total of 22.00 from holding Lutian Machinery Co or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tengda Construction Group vs. Lutian Machinery Co
Performance |
| Timeline |
| Tengda Construction |
| Lutian Machinery |
Tengda Construction and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tengda Construction and Lutian Machinery
The main advantage of trading using opposite Tengda Construction and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction 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.| Tengda Construction vs. Zhejiang Kingland Pipeline | Tengda Construction vs. Longmaster Information Tech | Tengda Construction vs. Yonyou Auto Information | Tengda Construction vs. Keda Clean Energy |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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