Correlation Between Lutian Machinery and Kuang Chi
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By analyzing existing cross correlation between Lutian Machinery Co and Kuang Chi Technologies, you can compare the effects of market volatilities on Lutian Machinery and Kuang Chi 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 Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Kuang Chi.
Diversification Opportunities for Lutian Machinery and Kuang Chi
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Kuang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies 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 Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Kuang Chi go up and down completely randomly.
Pair Corralation between Lutian Machinery and Kuang Chi
Assuming the 90 days trading horizon Lutian Machinery Co is expected to under-perform the Kuang Chi. But the stock apears to be less risky and, when comparing its historical volatility, Lutian Machinery Co is 1.55 times less risky than Kuang Chi. The stock trades about 0.0 of its potential returns per unit of risk. The Kuang Chi Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,406 in Kuang Chi Technologies on September 12, 2024 and sell it today you would earn a total of 2,746 from holding Kuang Chi Technologies or generate 195.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Kuang Chi Technologies
Performance |
| Timeline |
| Lutian Machinery |
| Kuang Chi Technologies |
Lutian Machinery and Kuang Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Kuang Chi
The main advantage of trading using opposite Lutian Machinery and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
| Kuang Chi vs. Lutian Machinery Co | Kuang Chi vs. PetroChina Co Ltd | Kuang Chi vs. Bank of China | Kuang Chi vs. Gansu Jiu Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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