Correlation Between Lutian Machinery and Aofu Environmental
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By analyzing existing cross correlation between Lutian Machinery Co and Aofu Environmental Technology, you can compare the effects of market volatilities on Lutian Machinery and Aofu Environmental 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 Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Aofu Environmental.
Diversification Opportunities for Lutian Machinery and Aofu Environmental
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Aofu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental 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 Aofu Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aofu Environmental has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Aofu Environmental go up and down completely randomly.
Pair Corralation between Lutian Machinery and Aofu Environmental
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.62 times more return on investment than Aofu Environmental. However, Lutian Machinery Co is 1.62 times less risky than Aofu Environmental. It trades about 0.05 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about -0.11 per unit of risk. If you would invest 1,539 in Lutian Machinery Co on October 27, 2024 and sell it today you would earn a total of 23.00 from holding Lutian Machinery Co or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Aofu Environmental Technology
Performance |
| Timeline |
| Lutian Machinery |
| Aofu Environmental |
Lutian Machinery and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Aofu Environmental
The main advantage of trading using opposite Lutian Machinery and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Aofu Environmental 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 Aofu Environmental will offset losses from the drop in Aofu Environmental's long position.| Lutian Machinery vs. PetroChina Co Ltd | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. China Petroleum Chemical | Lutian Machinery vs. China Construction Bank |
| Aofu Environmental vs. Miracll Chemicals Co | Aofu Environmental vs. CICT Mobile Communication | Aofu Environmental vs. Railway Signal Communication | Aofu Environmental vs. Eastern Communications Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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