Correlation Between Lutian Machinery and Anji Foodstuff
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By analyzing existing cross correlation between Lutian Machinery Co and Anji Foodstuff Co, you can compare the effects of market volatilities on Lutian Machinery and Anji Foodstuff 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 Anji Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Anji Foodstuff.
Diversification Opportunities for Lutian Machinery and Anji Foodstuff
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Anji is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Anji Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anji Foodstuff 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 Anji Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anji Foodstuff has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Anji Foodstuff go up and down completely randomly.
Pair Corralation between Lutian Machinery and Anji Foodstuff
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 1.29 times less return on investment than Anji Foodstuff. But when comparing it to its historical volatility, Lutian Machinery Co is 1.06 times less risky than Anji Foodstuff. It trades about 0.16 of its potential returns per unit of risk. Anji Foodstuff Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Anji Foodstuff Co on September 2, 2024 and sell it today you would earn a total of 218.00 from holding Anji Foodstuff Co or generate 33.54% 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. Anji Foodstuff Co
Performance |
| Timeline |
| Lutian Machinery |
| Anji Foodstuff |
Lutian Machinery and Anji Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Anji Foodstuff
The main advantage of trading using opposite Lutian Machinery and Anji Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Anji Foodstuff 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 Anji Foodstuff will offset losses from the drop in Anji Foodstuff's long position.| Lutian Machinery vs. Hangzhou Gaoxin Rubber | Lutian Machinery vs. Chengtun Mining Group | Lutian Machinery vs. Eastern Air Logistics | Lutian Machinery vs. Suzhou Xingye Material |
| Anji Foodstuff vs. Nanjing Putian Telecommunications | Anji Foodstuff vs. Shenzhen Hifuture Electric | Anji Foodstuff vs. Tianjin Realty Development | Anji Foodstuff vs. Shenyang Huitian Thermal |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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