Correlation Between Lutian Machinery and Jinling Hotel
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By analyzing existing cross correlation between Lutian Machinery Co and Jinling Hotel Corp, you can compare the effects of market volatilities on Lutian Machinery and Jinling Hotel 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 Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Jinling Hotel.
Diversification Opportunities for Lutian Machinery and Jinling Hotel
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Jinling is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp 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 Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Jinling Hotel go up and down completely randomly.
Pair Corralation between Lutian Machinery and Jinling Hotel
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.26 times more return on investment than Jinling Hotel. However, Lutian Machinery is 1.26 times more volatile than Jinling Hotel Corp. It trades about 0.13 of its potential returns per unit of risk. Jinling Hotel Corp is currently generating about 0.12 per unit of risk. If you would invest 1,410 in Lutian Machinery Co on August 29, 2024 and sell it today you would earn a total of 105.00 from holding Lutian Machinery Co or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Jinling Hotel Corp
Performance |
| Timeline |
| Lutian Machinery |
| Jinling Hotel Corp |
Lutian Machinery and Jinling Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Jinling Hotel
The main advantage of trading using opposite Lutian Machinery and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Jinling Hotel 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 Jinling Hotel will offset losses from the drop in Jinling Hotel'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 |
| Jinling Hotel vs. Biwin Storage Technology | Jinling Hotel vs. PetroChina Co Ltd | Jinling Hotel vs. Industrial and Commercial | Jinling Hotel vs. China Construction Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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