Correlation Between Lutian Machinery and Huatian Hotel
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By analyzing existing cross correlation between Lutian Machinery Co and Huatian Hotel Group, you can compare the effects of market volatilities on Lutian Machinery and Huatian Hotel 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 Lutian Machinery with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Huatian Hotel.
Diversification Opportunities for Lutian Machinery and Huatian Hotel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Huatian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Huatian Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatian Hotel Group and Lutian 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 Lutian Machinery Co are associated (or correlated) with Huatian Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatian Hotel Group has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Huatian Hotel go up and down completely randomly.
Pair Corralation between Lutian Machinery and Huatian Hotel
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.74 times more return on investment than Huatian Hotel. However, Lutian Machinery Co is 1.35 times less risky than Huatian Hotel. It trades about 0.3 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about 0.1 per unit of risk. If you would invest 1,480 in Lutian Machinery Co on November 6, 2024 and sell it today you would earn a total of 103.00 from holding Lutian Machinery Co or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Huatian Hotel Group
Performance |
| Timeline |
| Lutian Machinery |
| Huatian Hotel Group |
Lutian Machinery and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Huatian Hotel
The main advantage of trading using opposite Lutian Machinery and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Huatian Hotel 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 Huatian Hotel will offset losses from the drop in Huatian Hotel's long position.| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
| Huatian Hotel vs. Shenzhen Silver Basis | Huatian Hotel vs. Hangzhou Pinming Software | Huatian Hotel vs. Beijing Baolande Software | Huatian Hotel vs. GuoChuang Software Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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