Correlation Between Lutian Machinery and Qumei Furniture
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By analyzing existing cross correlation between Lutian Machinery Co and Qumei Furniture Group, you can compare the effects of market volatilities on Lutian Machinery and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Qumei Furniture.
Diversification Opportunities for Lutian Machinery and Qumei Furniture
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Qumei is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Qumei Furniture go up and down completely randomly.
Pair Corralation between Lutian Machinery and Qumei Furniture
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.7 times more return on investment than Qumei Furniture. However, Lutian Machinery Co is 1.44 times less risky than Qumei Furniture. It trades about 0.0 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.03 per unit of risk. If you would invest 1,699 in Lutian Machinery Co on September 12, 2024 and sell it today you would lose (130.00) from holding Lutian Machinery Co or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Qumei Furniture Group
Performance |
| Timeline |
| Lutian Machinery |
| Qumei Furniture Group |
Lutian Machinery and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Qumei Furniture
The main advantage of trading using opposite Lutian Machinery and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture's long position.| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
| Qumei Furniture vs. Lutian Machinery Co | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. Bank of China | Qumei Furniture vs. Gansu Jiu Steel |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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