Correlation Between Luyin Investment and Guangdong Advertising
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By analyzing existing cross correlation between Luyin Investment Group and Guangdong Advertising Co, you can compare the effects of market volatilities on Luyin Investment and Guangdong Advertising 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 Luyin Investment with a short position of Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luyin Investment and Guangdong Advertising.
Diversification Opportunities for Luyin Investment and Guangdong Advertising
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luyin and Guangdong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Luyin Investment Group and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising and Luyin Investment 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 Luyin Investment Group are associated (or correlated) with Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of Luyin Investment i.e., Luyin Investment and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Luyin Investment and Guangdong Advertising
Assuming the 90 days trading horizon Luyin Investment is expected to generate 7.81 times less return on investment than Guangdong Advertising. But when comparing it to its historical volatility, Luyin Investment Group is 4.16 times less risky than Guangdong Advertising. It trades about 0.13 of its potential returns per unit of risk. Guangdong Advertising Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Guangdong Advertising Co on September 5, 2024 and sell it today you would earn a total of 250.00 from holding Guangdong Advertising Co or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luyin Investment Group vs. Guangdong Advertising Co
Performance |
| Timeline |
| Luyin Investment |
| Guangdong Advertising |
Luyin Investment and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luyin Investment and Guangdong Advertising
The main advantage of trading using opposite Luyin Investment and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luyin Investment position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| Luyin Investment vs. Wanhua Chemical Group | Luyin Investment vs. Baoshan Iron Steel | Luyin Investment vs. Rongsheng Petrochemical Co | Luyin Investment vs. Shandong Gold Mining |
| Guangdong Advertising vs. Industrial and Commercial | Guangdong Advertising vs. China Construction Bank | Guangdong Advertising vs. Bank of China | Guangdong Advertising vs. Agricultural Bank of |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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