Correlation Between Lutian Machinery and Tangshan Port
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By analyzing existing cross correlation between Lutian Machinery Co and Tangshan Port Group, you can compare the effects of market volatilities on Lutian Machinery and Tangshan Port 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 Tangshan Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Tangshan Port.
Diversification Opportunities for Lutian Machinery and Tangshan Port
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lutian and Tangshan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Tangshan Port Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangshan Port Group 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 Tangshan Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangshan Port Group has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Tangshan Port go up and down completely randomly.
Pair Corralation between Lutian Machinery and Tangshan Port
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 4.3 times less return on investment than Tangshan Port. In addition to that, Lutian Machinery is 1.28 times more volatile than Tangshan Port Group. It trades about 0.02 of its total potential returns per unit of risk. Tangshan Port Group is currently generating about 0.12 per unit of volatility. If you would invest 435.00 in Tangshan Port Group on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Tangshan Port Group or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lutian Machinery Co vs. Tangshan Port Group
Performance |
| Timeline |
| Lutian Machinery |
| Tangshan Port Group |
Lutian Machinery and Tangshan Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Tangshan Port
The main advantage of trading using opposite Lutian Machinery and Tangshan Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Tangshan Port 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 Tangshan Port will offset losses from the drop in Tangshan Port'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 |
| Tangshan Port vs. Beijing SPC Environment | Tangshan Port vs. Gansu Jiu Steel | Tangshan Port vs. Shanghai Broadband Technology | Tangshan Port vs. Silkroad Visual Technology |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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