Correlation Between Lutian Machinery and Ming Yang
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By analyzing existing cross correlation between Lutian Machinery Co and Ming Yang Smart, you can compare the effects of market volatilities on Lutian Machinery and Ming Yang 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 Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Ming Yang.
Diversification Opportunities for Lutian Machinery and Ming Yang
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Ming is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart 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 Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Ming Yang go up and down completely randomly.
Pair Corralation between Lutian Machinery and Ming Yang
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 2.0 times less return on investment than Ming Yang. But when comparing it to its historical volatility, Lutian Machinery Co is 1.16 times less risky than Ming Yang. It trades about 0.14 of its potential returns per unit of risk. Ming Yang Smart is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,191 in Ming Yang Smart on August 31, 2024 and sell it today you would earn a total of 191.00 from holding Ming Yang Smart or generate 16.04% 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. Ming Yang Smart
Performance |
Timeline |
Lutian Machinery |
Ming Yang Smart |
Lutian Machinery and Ming Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lutian Machinery and Ming Yang
The main advantage of trading using opposite Lutian Machinery and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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