Correlation Between Lutian Machinery and Jiajia Food
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By analyzing existing cross correlation between Lutian Machinery Co and Jiajia Food Group, you can compare the effects of market volatilities on Lutian Machinery and Jiajia Food 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 Jiajia Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Jiajia Food.
Diversification Opportunities for Lutian Machinery and Jiajia Food
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Jiajia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Jiajia Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiajia Food Group 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 Jiajia Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiajia Food Group has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Jiajia Food go up and down completely randomly.
Pair Corralation between Lutian Machinery and Jiajia Food
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 3.66 times less return on investment than Jiajia Food. But when comparing it to its historical volatility, Lutian Machinery Co is 1.36 times less risky than Jiajia Food. It trades about 0.01 of its potential returns per unit of risk. Jiajia Food Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 442.00 in Jiajia Food Group on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Jiajia Food Group or generate 5.2% 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. Jiajia Food Group
Performance |
| Timeline |
| Lutian Machinery |
| Jiajia Food Group |
Lutian Machinery and Jiajia Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Jiajia Food
The main advantage of trading using opposite Lutian Machinery and Jiajia Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Jiajia Food 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 Jiajia Food will offset losses from the drop in Jiajia Food's 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 |
| Jiajia Food vs. Pengxin International Mining | Jiajia Food vs. Shandong Polymer Biochemicals | Jiajia Food vs. Industrial Securities Co | Jiajia Food vs. Shenzhen Shenbao Industrial |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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