Correlation Between Lutian Machinery and Qingdao Foods
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By analyzing existing cross correlation between Lutian Machinery Co and Qingdao Foods Co, you can compare the effects of market volatilities on Lutian Machinery and Qingdao Foods 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 Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Qingdao Foods.
Diversification Opportunities for Lutian Machinery and Qingdao Foods
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Qingdao is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods 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 Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Qingdao Foods go up and down completely randomly.
Pair Corralation between Lutian Machinery and Qingdao Foods
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 1.85 times less return on investment than Qingdao Foods. But when comparing it to its historical volatility, Lutian Machinery Co is 1.56 times less risky than Qingdao Foods. It trades about 0.12 of its potential returns per unit of risk. Qingdao Foods Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,351 in Qingdao Foods Co on September 2, 2024 and sell it today you would earn a total of 127.00 from holding Qingdao Foods Co or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Qingdao Foods Co
Performance |
| Timeline |
| Lutian Machinery |
| Qingdao Foods |
Lutian Machinery and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Qingdao Foods
The main advantage of trading using opposite Lutian Machinery and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Lutian Machinery vs. Hangzhou Gaoxin Rubber | Lutian Machinery vs. Chengtun Mining Group | Lutian Machinery vs. Eastern Air Logistics | Lutian Machinery vs. Suzhou Xingye Material |
| Qingdao Foods vs. Fujian Nanwang Environment | Qingdao Foods vs. Wuhan Yangtze Communication | Qingdao Foods vs. Sunwave Communications Co | Qingdao Foods vs. Tongyu Communication |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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