Correlation Between Lutian Machinery and Marssenger Kitchenware
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By analyzing existing cross correlation between Lutian Machinery Co and Marssenger Kitchenware Co, you can compare the effects of market volatilities on Lutian Machinery and Marssenger Kitchenware 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 Marssenger Kitchenware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Marssenger Kitchenware.
Diversification Opportunities for Lutian Machinery and Marssenger Kitchenware
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Marssenger is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Marssenger Kitchenware Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marssenger Kitchenware 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 Marssenger Kitchenware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marssenger Kitchenware has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Marssenger Kitchenware go up and down completely randomly.
Pair Corralation between Lutian Machinery and Marssenger Kitchenware
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 2.76 times less return on investment than Marssenger Kitchenware. But when comparing it to its historical volatility, Lutian Machinery Co is 2.0 times less risky than Marssenger Kitchenware. It trades about 0.09 of its potential returns per unit of risk. Marssenger Kitchenware Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,514 in Marssenger Kitchenware Co on September 13, 2024 and sell it today you would earn a total of 133.00 from holding Marssenger Kitchenware Co or generate 8.78% 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. Marssenger Kitchenware Co
Performance |
| Timeline |
| Lutian Machinery |
| Marssenger Kitchenware |
Lutian Machinery and Marssenger Kitchenware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Marssenger Kitchenware
The main advantage of trading using opposite Lutian Machinery and Marssenger Kitchenware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Marssenger Kitchenware 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 Marssenger Kitchenware will offset losses from the drop in Marssenger Kitchenware'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 |
| Marssenger Kitchenware vs. Lutian Machinery Co | Marssenger Kitchenware vs. China Longyuan Power | Marssenger Kitchenware vs. PetroChina Co Ltd | Marssenger Kitchenware vs. Bank of China |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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