Correlation Between Lutian Machinery and Shenzhen Topway
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By analyzing existing cross correlation between Lutian Machinery Co and Shenzhen Topway Video, you can compare the effects of market volatilities on Lutian Machinery and Shenzhen Topway 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 Shenzhen Topway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Shenzhen Topway.
Diversification Opportunities for Lutian Machinery and Shenzhen Topway
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Shenzhen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Shenzhen Topway Video in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Topway Video 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 Shenzhen Topway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Topway Video has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Shenzhen Topway go up and down completely randomly.
Pair Corralation between Lutian Machinery and Shenzhen Topway
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 5.06 times less return on investment than Shenzhen Topway. But when comparing it to its historical volatility, Lutian Machinery Co is 1.85 times less risky than Shenzhen Topway. It trades about 0.02 of its potential returns per unit of risk. Shenzhen Topway Video is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 639.00 in Shenzhen Topway Video on September 14, 2024 and sell it today you would earn a total of 400.00 from holding Shenzhen Topway Video or generate 62.6% 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. Shenzhen Topway Video
Performance |
| Timeline |
| Lutian Machinery |
| Shenzhen Topway Video |
Lutian Machinery and Shenzhen Topway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Shenzhen Topway
The main advantage of trading using opposite Lutian Machinery and Shenzhen Topway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Shenzhen Topway 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 Shenzhen Topway will offset losses from the drop in Shenzhen Topway'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 |
| Shenzhen Topway vs. Lutian Machinery Co | Shenzhen Topway vs. PetroChina Co Ltd | Shenzhen Topway vs. Bank of China | Shenzhen Topway vs. China Citic Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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