Correlation Between Lutian Machinery and Sinomach Automobile
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By analyzing existing cross correlation between Lutian Machinery Co and Sinomach Automobile Co, you can compare the effects of market volatilities on Lutian Machinery and Sinomach Automobile 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Sinomach Automobile.
Diversification Opportunities for Lutian Machinery and Sinomach Automobile
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Sinomach is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Lutian Machinery and Sinomach Automobile
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.75 times more return on investment than Sinomach Automobile. However, Lutian Machinery Co is 1.34 times less risky than Sinomach Automobile. It trades about -0.01 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about -0.01 per unit of risk. If you would invest 1,811 in Lutian Machinery Co on September 12, 2024 and sell it today you would lose (242.00) from holding Lutian Machinery Co or give up 13.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Sinomach Automobile Co
Performance |
| Timeline |
| Lutian Machinery |
| Sinomach Automobile |
Lutian Machinery and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Sinomach Automobile
The main advantage of trading using opposite Lutian Machinery and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
| Sinomach Automobile vs. Lutian Machinery Co | Sinomach Automobile vs. PetroChina Co Ltd | Sinomach Automobile vs. Bank of China | Sinomach Automobile vs. Gansu Jiu Steel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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