Correlation Between Senci Electric and Lutian Machinery
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By analyzing existing cross correlation between Senci Electric Machinery and Lutian Machinery Co, you can compare the effects of market volatilities on Senci Electric 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 Senci Electric with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and Lutian Machinery.
Diversification Opportunities for Senci Electric and Lutian Machinery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senci and Lutian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Senci Electric 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 Senci Electric Machinery 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 Senci Electric i.e., Senci Electric and Lutian Machinery go up and down completely randomly.
Pair Corralation between Senci Electric and Lutian Machinery
Assuming the 90 days trading horizon Senci Electric Machinery is expected to generate 2.19 times more return on investment than Lutian Machinery. However, Senci Electric is 2.19 times more volatile than Lutian Machinery Co. It trades about 0.04 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.13 per unit of risk. If you would invest 1,680 in Senci Electric Machinery on October 15, 2024 and sell it today you would earn a total of 30.00 from holding Senci Electric Machinery or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senci Electric Machinery vs. Lutian Machinery Co
Performance |
| Timeline |
| Senci Electric Machinery |
| Lutian Machinery |
Senci Electric and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senci Electric and Lutian Machinery
The main advantage of trading using opposite Senci Electric and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric 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.| Senci Electric vs. Cloud Live Technology | Senci Electric vs. Nanjing Putian Telecommunications | Senci Electric vs. Tianjin Realty Development | Senci Electric vs. Shenzhen Coship Electronics |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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