Correlation Between Industrial and Linzhou Heavy
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By analyzing existing cross correlation between Industrial and Commercial and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Industrial and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Linzhou Heavy.
Diversification Opportunities for Industrial and Linzhou Heavy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Linzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Industrial i.e., Industrial and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Industrial and Linzhou Heavy
Assuming the 90 days trading horizon Industrial is expected to generate 2.38 times less return on investment than Linzhou Heavy. But when comparing it to its historical volatility, Industrial and Commercial is 3.4 times less risky than Linzhou Heavy. It trades about 0.32 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Linzhou Heavy Machinery on September 12, 2024 and sell it today you would earn a total of 60.00 from holding Linzhou Heavy Machinery or generate 14.81% 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. Linzhou Heavy Machinery
Performance |
| Timeline |
| Industrial and Commercial |
| Linzhou Heavy Machinery |
Industrial and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Linzhou Heavy
The main advantage of trading using opposite Industrial and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Industrial vs. Eastroc Beverage Group | Industrial vs. China Publishing Media | Industrial vs. Inly Media Co | Industrial vs. Beijing Sanyuan Foods |
| Linzhou Heavy vs. Agricultural Bank of | Linzhou Heavy vs. Industrial and Commercial | Linzhou Heavy vs. Bank of China | Linzhou Heavy vs. PetroChina Co Ltd |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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