Correlation Between Lutian Machinery and Aluminum Corp
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By analyzing existing cross correlation between Lutian Machinery Co and Aluminum Corp of, you can compare the effects of market volatilities on Lutian Machinery and Aluminum Corp 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 Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Aluminum Corp.
Diversification Opportunities for Lutian Machinery and Aluminum Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lutian and Aluminum is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum 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 Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Aluminum Corp go up and down completely randomly.
Pair Corralation between Lutian Machinery and Aluminum Corp
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.8 times more return on investment than Aluminum Corp. However, Lutian Machinery Co is 1.25 times less risky than Aluminum Corp. It trades about 0.04 of its potential returns per unit of risk. Aluminum Corp of is currently generating about -0.1 per unit of risk. If you would invest 1,516 in Lutian Machinery Co on September 3, 2024 and sell it today you would earn a total of 47.00 from holding Lutian Machinery Co or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Aluminum Corp of
Performance |
| Timeline |
| Lutian Machinery |
| Aluminum Corp |
Lutian Machinery and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Aluminum Corp
The main advantage of trading using opposite Lutian Machinery and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Aluminum Corp 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 Aluminum Corp will offset losses from the drop in Aluminum Corp'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 |
| Aluminum Corp vs. ROPEOK Technology Group | Aluminum Corp vs. Kingsignal Technology Co | Aluminum Corp vs. Northking Information Technology | Aluminum Corp vs. Henan Shuanghui Investment |
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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