Correlation Between Lutian Machinery and Agricultural Bank
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By analyzing existing cross correlation between Lutian Machinery Co and Agricultural Bank of, you can compare the effects of market volatilities on Lutian Machinery and Agricultural Bank 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 Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Agricultural Bank.
Diversification Opportunities for Lutian Machinery and Agricultural Bank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Agricultural is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank 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 Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Agricultural Bank go up and down completely randomly.
Pair Corralation between Lutian Machinery and Agricultural Bank
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.73 times more return on investment than Agricultural Bank. However, Lutian Machinery is 1.73 times more volatile than Agricultural Bank of. It trades about 0.17 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.13 per unit of risk. If you would invest 1,261 in Lutian Machinery Co on September 12, 2024 and sell it today you would earn a total of 329.00 from holding Lutian Machinery Co or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Agricultural Bank of
Performance |
| Timeline |
| Lutian Machinery |
| Agricultural Bank |
Lutian Machinery and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Agricultural Bank
The main advantage of trading using opposite Lutian Machinery and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.| Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. China Mobile Limited |
| Agricultural Bank vs. Industrial and Commercial | Agricultural Bank vs. China Construction Bank | Agricultural Bank vs. Bank of China | Agricultural Bank vs. PetroChina Co Ltd |
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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