Correlation Between Anyang Iron and Lutian Machinery
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By analyzing existing cross correlation between Anyang Iron Steel and Lutian Machinery Co, you can compare the effects of market volatilities on Anyang Iron 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 Anyang Iron with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anyang Iron and Lutian Machinery.
Diversification Opportunities for Anyang Iron and Lutian Machinery
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anyang and Lutian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Anyang Iron Steel and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Anyang Iron 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 Anyang Iron Steel 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 Anyang Iron i.e., Anyang Iron and Lutian Machinery go up and down completely randomly.
Pair Corralation between Anyang Iron and Lutian Machinery
Assuming the 90 days trading horizon Anyang Iron Steel is expected to generate 1.75 times more return on investment than Lutian Machinery. However, Anyang Iron is 1.75 times more volatile than Lutian Machinery Co. It trades about 0.11 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.13 per unit of risk. If you would invest 133.00 in Anyang Iron Steel on October 18, 2024 and sell it today you would earn a total of 43.00 from holding Anyang Iron Steel or generate 32.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anyang Iron Steel vs. Lutian Machinery Co
Performance |
| Timeline |
| Anyang Iron Steel |
| Lutian Machinery |
Anyang Iron and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anyang Iron and Lutian Machinery
The main advantage of trading using opposite Anyang Iron and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anyang Iron 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.| Anyang Iron vs. Ningbo Fangzheng Automobile | Anyang Iron vs. Guangxi Wuzhou Communications | Anyang Iron vs. Tangel Publishing | Anyang Iron vs. Shanghai Action Education |
| Lutian Machinery vs. City Development Environment | Lutian Machinery vs. Guangdong Liantai Environmental | Lutian Machinery vs. Shenzhen MYS Environmental | Lutian Machinery vs. Anyang Iron Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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