Correlation Between Lutian Machinery and Tianjin Pengling
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By analyzing existing cross correlation between Lutian Machinery Co and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Lutian Machinery and Tianjin Pengling 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 Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Tianjin Pengling.
Diversification Opportunities for Lutian Machinery and Tianjin Pengling
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Tianjin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Tianjin Pengling Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Pengling Rubber 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 Tianjin Pengling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Pengling Rubber has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Lutian Machinery and Tianjin Pengling
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.74 times more return on investment than Tianjin Pengling. However, Lutian Machinery Co is 1.35 times less risky than Tianjin Pengling. It trades about 0.09 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.0 per unit of risk. If you would invest 1,540 in Lutian Machinery Co on September 13, 2024 and sell it today you would earn a total of 50.00 from holding Lutian Machinery Co or generate 3.25% 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. Tianjin Pengling Rubber
Performance |
| Timeline |
| Lutian Machinery |
| Tianjin Pengling Rubber |
Lutian Machinery and Tianjin Pengling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Tianjin Pengling
The main advantage of trading using opposite Lutian Machinery and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Tianjin Pengling 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 Tianjin Pengling will offset losses from the drop in Tianjin Pengling's long position.| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
| Tianjin Pengling vs. Chison Medical Technologies | Tianjin Pengling vs. Double Medical Technology | Tianjin Pengling vs. Jinhui Liquor Co | Tianjin Pengling vs. Zhejiang Publishing Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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