Correlation Between Lutian Machinery and Shaanxi Broadcast
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By analyzing existing cross correlation between Lutian Machinery Co and Shaanxi Broadcast TV, you can compare the effects of market volatilities on Lutian Machinery and Shaanxi Broadcast 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 Shaanxi Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Shaanxi Broadcast.
Diversification Opportunities for Lutian Machinery and Shaanxi Broadcast
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Shaanxi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Shaanxi Broadcast TV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Broadcast 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 Shaanxi Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Broadcast has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Shaanxi Broadcast go up and down completely randomly.
Pair Corralation between Lutian Machinery and Shaanxi Broadcast
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 1.19 times less return on investment than Shaanxi Broadcast. But when comparing it to its historical volatility, Lutian Machinery Co is 1.25 times less risky than Shaanxi Broadcast. It trades about 0.18 of its potential returns per unit of risk. Shaanxi Broadcast TV is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Shaanxi Broadcast TV on August 25, 2024 and sell it today you would earn a total of 29.00 from holding Shaanxi Broadcast TV or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lutian Machinery Co vs. Shaanxi Broadcast TV
Performance |
| Timeline |
| Lutian Machinery |
| Shaanxi Broadcast |
Lutian Machinery and Shaanxi Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Shaanxi Broadcast
The main advantage of trading using opposite Lutian Machinery and Shaanxi Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Shaanxi Broadcast 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 Shaanxi Broadcast will offset losses from the drop in Shaanxi Broadcast's long position.| Lutian Machinery vs. Biwin Storage Technology | Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Construction Bank |
| Shaanxi Broadcast vs. Rising Nonferrous Metals | Shaanxi Broadcast vs. Western Metal Materials | Shaanxi Broadcast vs. Ningbo Construction Co | Shaanxi Broadcast vs. Lutian Machinery Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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