Correlation Between Shanghai Material and Luyin Investment
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By analyzing existing cross correlation between Shanghai Material Trading and Luyin Investment Group, you can compare the effects of market volatilities on Shanghai Material and Luyin Investment 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 Shanghai Material with a short position of Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Luyin Investment.
Diversification Opportunities for Shanghai Material and Luyin Investment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Luyin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment and Shanghai Material 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 Shanghai Material Trading are associated (or correlated) with Luyin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luyin Investment has no effect on the direction of Shanghai Material i.e., Shanghai Material and Luyin Investment go up and down completely randomly.
Pair Corralation between Shanghai Material and Luyin Investment
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Luyin Investment. In addition to that, Shanghai Material is 1.99 times more volatile than Luyin Investment Group. It trades about -0.29 of its total potential returns per unit of risk. Luyin Investment Group is currently generating about -0.33 per unit of volatility. If you would invest 640.00 in Luyin Investment Group on October 12, 2024 and sell it today you would lose (73.00) from holding Luyin Investment Group or give up 11.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Luyin Investment Group
Performance |
| Timeline |
| Shanghai Material Trading |
| Luyin Investment |
Shanghai Material and Luyin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Luyin Investment
The main advantage of trading using opposite Shanghai Material and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Luyin Investment 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 Luyin Investment will offset losses from the drop in Luyin Investment's long position.| Shanghai Material vs. China Minmetals Rare | Shanghai Material vs. Xiandai Investment Co | Shanghai Material vs. Guangdong Jingyi Metal | Shanghai Material vs. Beijing Mainstreets Investment |
| Luyin Investment vs. Gansu Jiu Steel | Luyin Investment vs. Central Plains Environment | Luyin Investment vs. Anyang Iron Steel | Luyin Investment vs. Eastroc Beverage Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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