Correlation Between China Building and Luyin Investment
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By analyzing existing cross correlation between China Building Material and Luyin Investment Group, you can compare the effects of market volatilities on China Building 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 China Building with a short position of Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Luyin Investment.
Diversification Opportunities for China Building and Luyin Investment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Luyin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment and China Building 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 China Building Material 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 China Building i.e., China Building and Luyin Investment go up and down completely randomly.
Pair Corralation between China Building and Luyin Investment
Assuming the 90 days trading horizon China Building Material is expected to generate 1.6 times more return on investment than Luyin Investment. However, China Building is 1.6 times more volatile than Luyin Investment Group. It trades about 0.17 of its potential returns per unit of risk. Luyin Investment Group is currently generating about 0.14 per unit of risk. If you would invest 733.00 in China Building Material on September 13, 2024 and sell it today you would earn a total of 82.00 from holding China Building Material or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Building Material vs. Luyin Investment Group
Performance |
| Timeline |
| China Building Material |
| Luyin Investment |
China Building and Luyin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Luyin Investment
The main advantage of trading using opposite China Building and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building 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.| China Building vs. Humanwell Healthcare Group | China Building vs. Healthcare Co | China Building vs. PKU HealthCare Corp | China Building vs. Shandong Sinoglory Health |
| Luyin Investment vs. Zijin Mining Group | Luyin Investment vs. Wanhua Chemical Group | Luyin Investment vs. Baoshan Iron Steel | Luyin Investment vs. Shandong Gold Mining |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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