Correlation Between Lutian Machinery and Chengdu Xingrong
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By analyzing existing cross correlation between Lutian Machinery Co and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Lutian Machinery and Chengdu Xingrong 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 Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Chengdu Xingrong.
Diversification Opportunities for Lutian Machinery and Chengdu Xingrong
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lutian and Chengdu is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv 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 Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Lutian Machinery and Chengdu Xingrong
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.68 times more return on investment than Chengdu Xingrong. However, Lutian Machinery is 1.68 times more volatile than Chengdu Xingrong Investment. It trades about 0.06 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.42 per unit of risk. If you would invest 1,557 in Lutian Machinery Co on December 1, 2024 and sell it today you would earn a total of 24.00 from holding Lutian Machinery Co or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Lutian Machinery |
| Chengdu Xingrong Inv |
Lutian Machinery and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Chengdu Xingrong
The main advantage of trading using opposite Lutian Machinery and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Lutian Machinery vs. Jiangsu Yanghe Brewery | Lutian Machinery vs. Guangdong Qunxing Toys | Lutian Machinery vs. Cansino Biologics | Lutian Machinery vs. Humanwell Healthcare Group |
| Chengdu Xingrong vs. Jason Furniture | Chengdu Xingrong vs. Ziel Home Furnishing | Chengdu Xingrong vs. Jiangsu GDK Biotechnology | Chengdu Xingrong vs. Ningbo MedicalSystem Biotechnology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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