Correlation Between Lutian Machinery and Chongqing Brewery
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By analyzing existing cross correlation between Lutian Machinery Co and Chongqing Brewery Co, you can compare the effects of market volatilities on Lutian Machinery and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Chongqing Brewery.
Diversification Opportunities for Lutian Machinery and Chongqing Brewery
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Chongqing is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Lutian Machinery and Chongqing Brewery
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.0 times more return on investment than Chongqing Brewery. However, Lutian Machinery Co is 1.0 times less risky than Chongqing Brewery. It trades about 0.01 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.0 per unit of risk. If you would invest 1,540 in Lutian Machinery Co on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Lutian Machinery Co or generate 1.49% 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. Chongqing Brewery Co
Performance |
| Timeline |
| Lutian Machinery |
| Chongqing Brewery |
Lutian Machinery and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Chongqing Brewery
The main advantage of trading using opposite Lutian Machinery and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Lutian Machinery vs. Hangzhou Gaoxin Rubber | Lutian Machinery vs. Chengtun Mining Group | Lutian Machinery vs. Eastern Air Logistics | Lutian Machinery vs. Suzhou Xingye Material |
| Chongqing Brewery vs. BeiGene | Chongqing Brewery vs. Kweichow Moutai Co | Chongqing Brewery vs. Beijing Roborock Technology | Chongqing Brewery vs. G bits Network Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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