Correlation Between Lutian Machinery and Maoming Petro
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By analyzing existing cross correlation between Lutian Machinery Co and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Lutian Machinery and Maoming Petro 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 Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Maoming Petro.
Diversification Opportunities for Lutian Machinery and Maoming Petro
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Maoming is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical 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 Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Maoming Petro go up and down completely randomly.
Pair Corralation between Lutian Machinery and Maoming Petro
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.66 times more return on investment than Maoming Petro. However, Lutian Machinery Co is 1.51 times less risky than Maoming Petro. It trades about -0.15 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.32 per unit of risk. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Lutian Machinery |
| Maoming Petro Chemical |
Lutian Machinery and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Maoming Petro
The main advantage of trading using opposite Lutian Machinery and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Lutian Machinery vs. Xiamen Jihong Package | Lutian Machinery vs. Youyou Foods Co | Lutian Machinery vs. Jinhui Liquor Co | Lutian Machinery vs. Zhangjiagang Freetrade Science |
| Maoming Petro vs. Tongxing Environmental Protection | Maoming Petro vs. Innovative Medical Management | Maoming Petro vs. Xiangyu Medical Co | Maoming Petro vs. Shandong Iron and |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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