Correlation Between Lutian Machinery and Gansu Yasheng
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By analyzing existing cross correlation between Lutian Machinery Co and Gansu Yasheng Industrial, you can compare the effects of market volatilities on Lutian Machinery and Gansu Yasheng 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 Gansu Yasheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Gansu Yasheng.
Diversification Opportunities for Lutian Machinery and Gansu Yasheng
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Gansu is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Gansu Yasheng Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Yasheng Industrial 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 Gansu Yasheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Yasheng Industrial has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Gansu Yasheng go up and down completely randomly.
Pair Corralation between Lutian Machinery and Gansu Yasheng
Assuming the 90 days trading horizon Lutian Machinery Co is expected to under-perform the Gansu Yasheng. But the stock apears to be less risky and, when comparing its historical volatility, Lutian Machinery Co is 1.3 times less risky than Gansu Yasheng. The stock trades about -0.02 of its potential returns per unit of risk. The Gansu Yasheng Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Gansu Yasheng Industrial on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Gansu Yasheng Industrial or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Gansu Yasheng Industrial
Performance |
| Timeline |
| Lutian Machinery |
| Gansu Yasheng Industrial |
Lutian Machinery and Gansu Yasheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Gansu Yasheng
The main advantage of trading using opposite Lutian Machinery and Gansu Yasheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Gansu Yasheng 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 Gansu Yasheng will offset losses from the drop in Gansu Yasheng's long position.| Lutian Machinery vs. Zoje Resources Investment | Lutian Machinery vs. Gan Yuan Foods | Lutian Machinery vs. Jiamei Food Packaging | Lutian Machinery vs. Jiugui Liquor Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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