Correlation Between Lutian Machinery and Vanfund Urban
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By analyzing existing cross correlation between Lutian Machinery Co and Vanfund Urban Investment, you can compare the effects of market volatilities on Lutian Machinery and Vanfund Urban 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 Vanfund Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Vanfund Urban.
Diversification Opportunities for Lutian Machinery and Vanfund Urban
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Vanfund is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Vanfund Urban Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanfund Urban Investment 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 Vanfund Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanfund Urban Investment has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Vanfund Urban go up and down completely randomly.
Pair Corralation between Lutian Machinery and Vanfund Urban
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 1.44 times less return on investment than Vanfund Urban. But when comparing it to its historical volatility, Lutian Machinery Co is 2.09 times less risky than Vanfund Urban. It trades about 0.17 of its potential returns per unit of risk. Vanfund Urban Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 466.00 in Vanfund Urban Investment on November 1, 2024 and sell it today you would earn a total of 28.00 from holding Vanfund Urban Investment or generate 6.01% 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. Vanfund Urban Investment
Performance |
| Timeline |
| Lutian Machinery |
| Vanfund Urban Investment |
Lutian Machinery and Vanfund Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Vanfund Urban
The main advantage of trading using opposite Lutian Machinery and Vanfund Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Vanfund Urban 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 Vanfund Urban will offset losses from the drop in Vanfund Urban's long position.| Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. China Construction Bank |
| Vanfund Urban vs. Nanjing Putian Telecommunications | Vanfund Urban vs. Jiangxi Hengda Hi Tech | Vanfund Urban vs. Jilin Jlu Communication | Vanfund Urban vs. Lutian Machinery 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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