Correlation Between Qijing Machinery and Lutian Machinery
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By analyzing existing cross correlation between Qijing Machinery and Lutian Machinery Co, you can compare the effects of market volatilities on Qijing Machinery 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 Qijing Machinery with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Lutian Machinery.
Diversification Opportunities for Qijing Machinery and Lutian Machinery
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qijing and Lutian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Qijing 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 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 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 Qijing Machinery i.e., Qijing Machinery and Lutian Machinery go up and down completely randomly.
Pair Corralation between Qijing Machinery and Lutian Machinery
Assuming the 90 days trading horizon Qijing Machinery is expected to under-perform the Lutian Machinery. In addition to that, Qijing Machinery is 1.98 times more volatile than Lutian Machinery Co. It trades about -0.11 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.15 per unit of volatility. If you would invest 1,590 in Lutian Machinery Co on October 12, 2024 and sell it today you would lose (86.00) from holding Lutian Machinery Co or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qijing Machinery vs. Lutian Machinery Co
Performance |
| Timeline |
| Qijing Machinery |
| Lutian Machinery |
Qijing Machinery and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qijing Machinery and Lutian Machinery
The main advantage of trading using opposite Qijing Machinery and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery 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.| Qijing Machinery vs. Biwin Storage Technology | Qijing Machinery vs. PetroChina Co Ltd | Qijing Machinery vs. Industrial and Commercial | Qijing Machinery vs. China Construction Bank |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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