Correlation Between Lutian Machinery and Senci Electric
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By analyzing existing cross correlation between Lutian Machinery Co and Senci Electric Machinery, you can compare the effects of market volatilities on Lutian Machinery and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Senci Electric.
Diversification Opportunities for Lutian Machinery and Senci Electric
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Senci is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Senci Electric go up and down completely randomly.
Pair Corralation between Lutian Machinery and Senci Electric
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 2.31 times less return on investment than Senci Electric. But when comparing it to its historical volatility, Lutian Machinery Co is 1.27 times less risky than Senci Electric. It trades about 0.06 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,311 in Senci Electric Machinery on September 26, 2024 and sell it today you would earn a total of 422.00 from holding Senci Electric Machinery or generate 32.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Senci Electric Machinery
Performance |
| Timeline |
| Lutian Machinery |
| Senci Electric Machinery |
Lutian Machinery and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Senci Electric
The main advantage of trading using opposite Lutian Machinery and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| Lutian Machinery vs. Bank of China | Lutian Machinery vs. Kweichow Moutai Co | Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Bank of Communications |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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