Correlation Between Lutian Machinery and Zhejiang Yinlun
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By analyzing existing cross correlation between Lutian Machinery Co and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Lutian Machinery and Zhejiang Yinlun 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 Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Zhejiang Yinlun.
Diversification Opportunities for Lutian Machinery and Zhejiang Yinlun
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lutian and Zhejiang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery 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 Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Lutian Machinery and Zhejiang Yinlun
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 3.02 times less return on investment than Zhejiang Yinlun. But when comparing it to its historical volatility, Lutian Machinery Co is 1.23 times less risky than Zhejiang Yinlun. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Yinlun Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Zhejiang Yinlun Machinery on September 13, 2024 and sell it today you would earn a total of 584.00 from holding Zhejiang Yinlun Machinery or generate 48.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lutian Machinery Co vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Lutian Machinery |
| Zhejiang Yinlun Machinery |
Lutian Machinery and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Zhejiang Yinlun
The main advantage of trading using opposite Lutian Machinery and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Zhejiang Yinlun 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 Zhejiang Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
| Zhejiang Yinlun vs. Heilongjiang Transport Development | Zhejiang Yinlun vs. Eastroc Beverage Group | Zhejiang Yinlun vs. Shandong Hi Speed RoadBridge | Zhejiang Yinlun vs. Longjian Road Bridge |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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