Correlation Between Lutian Machinery and Beijing Sanyuan
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By analyzing existing cross correlation between Lutian Machinery Co and Beijing Sanyuan Foods, you can compare the effects of market volatilities on Lutian Machinery and Beijing Sanyuan 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 Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Beijing Sanyuan.
Diversification Opportunities for Lutian Machinery and Beijing Sanyuan
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Beijing is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods 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 Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between Lutian Machinery and Beijing Sanyuan
Assuming the 90 days trading horizon Lutian Machinery Co is expected to under-perform the Beijing Sanyuan. In addition to that, Lutian Machinery is 1.28 times more volatile than Beijing Sanyuan Foods. It trades about 0.0 of its total potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about 0.0 per unit of volatility. If you would invest 473.00 in Beijing Sanyuan Foods on August 31, 2024 and sell it today you would lose (22.00) from holding Beijing Sanyuan Foods or give up 4.65% 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. Beijing Sanyuan Foods
Performance |
| Timeline |
| Lutian Machinery |
| Beijing Sanyuan Foods |
Lutian Machinery and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Beijing Sanyuan
The main advantage of trading using opposite Lutian Machinery and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Beijing Sanyuan 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 Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| Lutian Machinery vs. Cultural Investment Holdings | Lutian Machinery vs. Gome Telecom Equipment | Lutian Machinery vs. Bus Online Co | Lutian Machinery vs. Holitech Technology Co |
| Beijing Sanyuan vs. Lutian Machinery Co | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. Bank of China | Beijing Sanyuan 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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