Correlation Between Universal Scientific and Lianhe Chemical
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By analyzing existing cross correlation between Universal Scientific Industrial and Lianhe Chemical Technology, you can compare the effects of market volatilities on Universal Scientific and Lianhe Chemical 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 Universal Scientific with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Scientific and Lianhe Chemical.
Diversification Opportunities for Universal Scientific and Lianhe Chemical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Lianhe is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Universal Scientific Industria and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and Universal Scientific 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 Universal Scientific Industrial are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Universal Scientific i.e., Universal Scientific and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Universal Scientific and Lianhe Chemical
Assuming the 90 days trading horizon Universal Scientific Industrial is expected to generate 1.07 times more return on investment than Lianhe Chemical. However, Universal Scientific is 1.07 times more volatile than Lianhe Chemical Technology. It trades about 0.0 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about -0.1 per unit of risk. If you would invest 1,629 in Universal Scientific Industrial on October 16, 2024 and sell it today you would lose (175.00) from holding Universal Scientific Industrial or give up 10.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Scientific Industria vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Universal Scientific |
| Lianhe Chemical Tech |
Universal Scientific and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Scientific and Lianhe Chemical
The main advantage of trading using opposite Universal Scientific and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Scientific position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.The idea behind Universal Scientific Industrial and Lianhe Chemical Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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