Correlation Between Industrial and LianChuang Electronic
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By analyzing existing cross correlation between Industrial and Commercial and LianChuang Electronic Technology, you can compare the effects of market volatilities on Industrial and LianChuang Electronic 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 Industrial with a short position of LianChuang Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and LianChuang Electronic.
Diversification Opportunities for Industrial and LianChuang Electronic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and LianChuang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and LianChuang Electronic Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianChuang Electronic and Industrial 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 Industrial and Commercial are associated (or correlated) with LianChuang Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianChuang Electronic has no effect on the direction of Industrial i.e., Industrial and LianChuang Electronic go up and down completely randomly.
Pair Corralation between Industrial and LianChuang Electronic
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.32 times more return on investment than LianChuang Electronic. However, Industrial and Commercial is 3.11 times less risky than LianChuang Electronic. It trades about 0.1 of its potential returns per unit of risk. LianChuang Electronic Technology is currently generating about 0.02 per unit of risk. If you would invest 481.00 in Industrial and Commercial on September 14, 2024 and sell it today you would earn a total of 161.00 from holding Industrial and Commercial or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. LianChuang Electronic Technolo
Performance |
| Timeline |
| Industrial and Commercial |
| LianChuang Electronic |
Industrial and LianChuang Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and LianChuang Electronic
The main advantage of trading using opposite Industrial and LianChuang Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, LianChuang Electronic 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 LianChuang Electronic will offset losses from the drop in LianChuang Electronic's long position.| Industrial vs. Allmed Medical Products | Industrial vs. Blue Sail Medical | Industrial vs. Yingde Greatchem Chemicals | Industrial vs. Zhongzhu Medical Holdings |
| LianChuang Electronic vs. Industrial and Commercial | LianChuang Electronic vs. Agricultural Bank of | LianChuang Electronic vs. China Construction Bank | LianChuang Electronic vs. Bank of China |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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