Correlation Between Lutian Machinery and Shuhua Sports
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By analyzing existing cross correlation between Lutian Machinery Co and Shuhua Sports Co, you can compare the effects of market volatilities on Lutian Machinery and Shuhua Sports 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 Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Shuhua Sports.
Diversification Opportunities for Lutian Machinery and Shuhua Sports
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Shuhua is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports 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 Shuhua Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuhua Sports has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Shuhua Sports go up and down completely randomly.
Pair Corralation between Lutian Machinery and Shuhua Sports
Assuming the 90 days trading horizon Lutian Machinery is expected to generate 12.15 times less return on investment than Shuhua Sports. But when comparing it to its historical volatility, Lutian Machinery Co is 1.17 times less risky than Shuhua Sports. It trades about 0.02 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 793.00 in Shuhua Sports Co on September 12, 2024 and sell it today you would earn a total of 86.00 from holding Shuhua Sports Co or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lutian Machinery Co vs. Shuhua Sports Co
Performance |
| Timeline |
| Lutian Machinery |
| Shuhua Sports |
Lutian Machinery and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Shuhua Sports
The main advantage of trading using opposite Lutian Machinery and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Shuhua Sports 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 Shuhua Sports will offset losses from the drop in Shuhua Sports' 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 |
| Shuhua Sports vs. Lutian Machinery Co | Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. Bank of China | Shuhua Sports 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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