Correlation Between Lutian Machinery and Zhejiang Juhua
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By analyzing existing cross correlation between Lutian Machinery Co and Zhejiang Juhua Co, you can compare the effects of market volatilities on Lutian Machinery and Zhejiang Juhua 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 Zhejiang Juhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Zhejiang Juhua.
Diversification Opportunities for Lutian Machinery and Zhejiang Juhua
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Zhejiang is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Zhejiang Juhua Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Juhua 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 Zhejiang Juhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Juhua has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Zhejiang Juhua go up and down completely randomly.
Pair Corralation between Lutian Machinery and Zhejiang Juhua
Assuming the 90 days trading horizon Lutian Machinery Co is expected to under-perform the Zhejiang Juhua. But the stock apears to be less risky and, when comparing its historical volatility, Lutian Machinery Co is 1.6 times less risky than Zhejiang Juhua. The stock trades about -0.15 of its potential returns per unit of risk. The Zhejiang Juhua Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,213 in Zhejiang Juhua Co on October 14, 2024 and sell it today you would earn a total of 292.00 from holding Zhejiang Juhua Co or generate 13.19% 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. Zhejiang Juhua Co
Performance |
| Timeline |
| Lutian Machinery |
| Zhejiang Juhua |
Lutian Machinery and Zhejiang Juhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Zhejiang Juhua
The main advantage of trading using opposite Lutian Machinery and Zhejiang Juhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Zhejiang Juhua 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 Zhejiang Juhua will offset losses from the drop in Zhejiang Juhua's long position.| Lutian Machinery vs. Chongqing Shunbo Aluminum | Lutian Machinery vs. Rising Nonferrous Metals | Lutian Machinery vs. Shandong Hongchuang Aluminum | Lutian Machinery vs. Everdisplay Optronics Shanghai |
| Zhejiang Juhua vs. Sinomach General Machinery | Zhejiang Juhua vs. Lutian Machinery Co | Zhejiang Juhua vs. Hunan Tyen Machinery | Zhejiang Juhua vs. Jiangsu Jinling Sports |
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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