Correlation Between Lutian Machinery and Guangzhou Tinci
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By analyzing existing cross correlation between Lutian Machinery Co and Guangzhou Tinci Materials, you can compare the effects of market volatilities on Lutian Machinery and Guangzhou Tinci 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 Guangzhou Tinci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Guangzhou Tinci.
Diversification Opportunities for Lutian Machinery and Guangzhou Tinci
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Guangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Guangzhou Tinci Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Tinci Materials 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 Guangzhou Tinci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Tinci Materials has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Guangzhou Tinci go up and down completely randomly.
Pair Corralation between Lutian Machinery and Guangzhou Tinci
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.9 times more return on investment than Guangzhou Tinci. However, Lutian Machinery Co is 1.11 times less risky than Guangzhou Tinci. It trades about -0.11 of its potential returns per unit of risk. Guangzhou Tinci Materials is currently generating about -0.48 per unit of risk. If you would invest 1,569 in Lutian Machinery Co on October 11, 2024 and sell it today you would lose (65.00) from holding Lutian Machinery Co or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Guangzhou Tinci Materials
Performance |
| Timeline |
| Lutian Machinery |
| Guangzhou Tinci Materials |
Lutian Machinery and Guangzhou Tinci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Guangzhou Tinci
The main advantage of trading using opposite Lutian Machinery and Guangzhou Tinci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Guangzhou Tinci 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 Guangzhou Tinci will offset losses from the drop in Guangzhou Tinci's long position.| Lutian Machinery vs. Xiamen Jihong Package | Lutian Machinery vs. Youyou Foods Co | Lutian Machinery vs. Jinhui Liquor Co | Lutian Machinery vs. Zhangjiagang Freetrade Science |
| Guangzhou Tinci vs. Jinlong Machinery Electronic | Guangzhou Tinci vs. Qijing Machinery | Guangzhou Tinci vs. Gifore Agricultural Machinery | Guangzhou Tinci vs. Lutian Machinery Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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