Correlation Between Qijing Machinery and Lier Chemical
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By analyzing existing cross correlation between Qijing Machinery and Lier Chemical Co, you can compare the effects of market volatilities on Qijing Machinery and Lier Chemical 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 Qijing Machinery with a short position of Lier Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Lier Chemical.
Diversification Opportunities for Qijing Machinery and Lier Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qijing and Lier is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Qijing Machinery and Lier Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lier Chemical and Qijing Machinery 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 Qijing Machinery are associated (or correlated) with Lier Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lier Chemical has no effect on the direction of Qijing Machinery i.e., Qijing Machinery and Lier Chemical go up and down completely randomly.
Pair Corralation between Qijing Machinery and Lier Chemical
Assuming the 90 days trading horizon Qijing Machinery is expected to generate 1.37 times more return on investment than Lier Chemical. However, Qijing Machinery is 1.37 times more volatile than Lier Chemical Co. It trades about 0.03 of its potential returns per unit of risk. Lier Chemical Co is currently generating about -0.07 per unit of risk. If you would invest 1,161 in Qijing Machinery on September 5, 2024 and sell it today you would earn a total of 253.00 from holding Qijing Machinery or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qijing Machinery vs. Lier Chemical Co
Performance |
| Timeline |
| Qijing Machinery |
| Lier Chemical |
Qijing Machinery and Lier Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qijing Machinery and Lier Chemical
The main advantage of trading using opposite Qijing Machinery and Lier Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery position performs unexpectedly, Lier Chemical 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 Lier Chemical will offset losses from the drop in Lier Chemical's long position.| Qijing Machinery vs. Chengdu Spaceon Electronics | Qijing Machinery vs. Shanghai CEO Environmental | Qijing Machinery vs. Huaxia Fund Management | Qijing Machinery vs. Zhejiang Kingland Pipeline |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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