Correlation Between Mengtian Home and Lutian Machinery
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By analyzing existing cross correlation between Mengtian Home Group and Lutian Machinery Co, you can compare the effects of market volatilities on Mengtian Home 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 Mengtian Home with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Lutian Machinery.
Diversification Opportunities for Mengtian Home and Lutian Machinery
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mengtian and Lutian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Mengtian Home 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 Mengtian Home Group 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 Mengtian Home i.e., Mengtian Home and Lutian Machinery go up and down completely randomly.
Pair Corralation between Mengtian Home and Lutian Machinery
Assuming the 90 days trading horizon Mengtian Home Group is expected to generate 0.83 times more return on investment than Lutian Machinery. However, Mengtian Home Group is 1.21 times less risky than Lutian Machinery. It trades about 0.19 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.09 per unit of risk. If you would invest 1,054 in Mengtian Home Group on September 13, 2024 and sell it today you would earn a total of 63.00 from holding Mengtian Home Group or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mengtian Home Group vs. Lutian Machinery Co
Performance |
| Timeline |
| Mengtian Home Group |
| Lutian Machinery |
Mengtian Home and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and Lutian Machinery
The main advantage of trading using opposite Mengtian Home and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home 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.| Mengtian Home vs. Lutian Machinery Co | Mengtian Home vs. China Longyuan Power | Mengtian Home vs. PetroChina Co Ltd | Mengtian Home vs. Bank of China |
| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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