Correlation Between Lutian Machinery and Huasi Agricultural
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By analyzing existing cross correlation between Lutian Machinery Co and Huasi Agricultural Development, you can compare the effects of market volatilities on Lutian Machinery and Huasi Agricultural 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 Huasi Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Huasi Agricultural.
Diversification Opportunities for Lutian Machinery and Huasi Agricultural
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Huasi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Huasi Agricultural Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huasi Agricultural 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 Huasi Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huasi Agricultural has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Huasi Agricultural go up and down completely randomly.
Pair Corralation between Lutian Machinery and Huasi Agricultural
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.13 times more return on investment than Huasi Agricultural. However, Lutian Machinery is 1.13 times more volatile than Huasi Agricultural Development. It trades about 0.19 of its potential returns per unit of risk. Huasi Agricultural Development is currently generating about 0.15 per unit of risk. If you would invest 1,383 in Lutian Machinery Co on August 30, 2024 and sell it today you would earn a total of 155.00 from holding Lutian Machinery Co or generate 11.21% 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. Huasi Agricultural Development
Performance |
| Timeline |
| Lutian Machinery |
| Huasi Agricultural |
Lutian Machinery and Huasi Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Huasi Agricultural
The main advantage of trading using opposite Lutian Machinery and Huasi Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Huasi Agricultural 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 Huasi Agricultural will offset losses from the drop in Huasi Agricultural's long position.| Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. China State Construction | Lutian Machinery vs. China Railway Group |
| Huasi Agricultural vs. Lutian Machinery Co | Huasi Agricultural vs. China Longyuan Power | Huasi Agricultural vs. Changshu Tongrun Auto | Huasi Agricultural vs. PetroChina Co Ltd |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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