Correlation Between Lutian Machinery and Spring Airlines
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By analyzing existing cross correlation between Lutian Machinery Co and Spring Airlines Co, you can compare the effects of market volatilities on Lutian Machinery and Spring Airlines 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 Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Spring Airlines.
Diversification Opportunities for Lutian Machinery and Spring Airlines
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lutian and Spring is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines 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 Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Spring Airlines go up and down completely randomly.
Pair Corralation between Lutian Machinery and Spring Airlines
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.91 times more return on investment than Spring Airlines. However, Lutian Machinery Co is 1.1 times less risky than Spring Airlines. It trades about -0.03 of its potential returns per unit of risk. Spring Airlines Co is currently generating about -0.2 per unit of risk. If you would invest 1,581 in Lutian Machinery Co on October 28, 2024 and sell it today you would lose (19.00) from holding Lutian Machinery Co or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Spring Airlines Co
Performance |
| Timeline |
| Lutian Machinery |
| Spring Airlines |
Lutian Machinery and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Spring Airlines
The main advantage of trading using opposite Lutian Machinery and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.| Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. China Construction Bank |
| Spring Airlines vs. GRIPM Advanced Materials | Spring Airlines vs. Qingdao Foods Co | Spring Airlines vs. Suzhou Xingye Material | Spring Airlines vs. Eastroc Beverage Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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