Correlation Between Ping An and Lutian Machinery
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By analyzing existing cross correlation between Ping An Insurance and Lutian Machinery Co, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Lutian Machinery.
Diversification Opportunities for Ping An and Lutian Machinery
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and Lutian is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Lutian Machinery go up and down completely randomly.
Pair Corralation between Ping An and Lutian Machinery
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Lutian Machinery. In addition to that, Ping An is 1.12 times more volatile than Lutian Machinery Co. It trades about -0.05 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.06 per unit of volatility. If you would invest 1,472 in Lutian Machinery Co on August 31, 2024 and sell it today you would earn a total of 66.00 from holding Lutian Machinery Co or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Lutian Machinery Co
Performance |
| Timeline |
| Ping An Insurance |
| Lutian Machinery |
Ping An and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Lutian Machinery
The main advantage of trading using opposite Ping An and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. Agricultural Bank of | Ping An vs. Hangzhou Pinming Software | Ping An vs. Shandong Mining Machinery | Ping An vs. GuoChuang Software Co |
| Lutian Machinery vs. Cultural Investment Holdings | Lutian Machinery vs. Gome Telecom Equipment | Lutian Machinery vs. Bus Online Co | Lutian Machinery vs. Holitech Technology Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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