Correlation Between Lutian Machinery and CNOOC
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By analyzing existing cross correlation between Lutian Machinery Co and CNOOC Limited, you can compare the effects of market volatilities on Lutian Machinery and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and CNOOC.
Diversification Opportunities for Lutian Machinery and CNOOC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lutian and CNOOC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and CNOOC go up and down completely randomly.
Pair Corralation between Lutian Machinery and CNOOC
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 3.35 times less return on investment than CNOOC. In addition to that, Lutian Machinery is 1.06 times more volatile than CNOOC Limited. It trades about 0.02 of its total potential returns per unit of risk. CNOOC Limited is currently generating about 0.07 per unit of volatility. If you would invest 1,925 in CNOOC Limited on September 3, 2024 and sell it today you would earn a total of 703.00 from holding CNOOC Limited or generate 36.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lutian Machinery Co vs. CNOOC Limited
Performance |
Timeline |
Lutian Machinery |
CNOOC Limited |
Lutian Machinery and CNOOC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lutian Machinery and CNOOC
The main advantage of trading using opposite Lutian Machinery and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC'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 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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