Correlation Between Lutian Machinery and CITIC Guoan
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By analyzing existing cross correlation between Lutian Machinery Co and CITIC Guoan Information, you can compare the effects of market volatilities on Lutian Machinery and CITIC Guoan 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 CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and CITIC Guoan.
Diversification Opportunities for Lutian Machinery and CITIC Guoan
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and CITIC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information 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 CITIC Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Guoan Information has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and CITIC Guoan go up and down completely randomly.
Pair Corralation between Lutian Machinery and CITIC Guoan
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 66.24 times less return on investment than CITIC Guoan. But when comparing it to its historical volatility, Lutian Machinery Co is 1.55 times less risky than CITIC Guoan. It trades about 0.0 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 203.00 in CITIC Guoan Information on December 4, 2024 and sell it today you would earn a total of 104.00 from holding CITIC Guoan Information or generate 51.23% 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. CITIC Guoan Information
Performance |
| Timeline |
| Lutian Machinery |
| CITIC Guoan Information |
Lutian Machinery and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and CITIC Guoan
The main advantage of trading using opposite Lutian Machinery and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, CITIC Guoan 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 CITIC Guoan will offset losses from the drop in CITIC Guoan's long position.| Lutian Machinery vs. Guosheng Financial Holding | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Lecron Energy Saving | Lutian Machinery vs. Anhui Gujing Distillery |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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