Correlation Between Lutian Machinery and Guangzhou Jointas
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By analyzing existing cross correlation between Lutian Machinery Co and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Lutian Machinery and Guangzhou Jointas 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 Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Guangzhou Jointas.
Diversification Opportunities for Lutian Machinery and Guangzhou Jointas
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lutian and Guangzhou is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Lutian Machinery and Guangzhou Jointas
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.79 times more return on investment than Guangzhou Jointas. However, Lutian Machinery Co is 1.27 times less risky than Guangzhou Jointas. It trades about -0.01 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about -0.04 per unit of risk. If you would invest 1,853 in Lutian Machinery Co on October 27, 2024 and sell it today you would lose (291.00) from holding Lutian Machinery Co or give up 15.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Lutian Machinery |
| Guangzhou Jointas |
Lutian Machinery and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Guangzhou Jointas
The main advantage of trading using opposite Lutian Machinery and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Guangzhou Jointas 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 Jointas will offset losses from the drop in Guangzhou Jointas' long position.| Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. China Construction Bank |
| Guangzhou Jointas vs. Chengdu Spaceon Electronics | Guangzhou Jointas vs. Bus Online Co | Guangzhou Jointas vs. China Asset Management | Guangzhou Jointas vs. Jilin OLED Material |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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