Correlation Between Lutian Machinery and Shenzhen Transsion
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By analyzing existing cross correlation between Lutian Machinery Co and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Lutian Machinery and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Shenzhen Transsion.
Diversification Opportunities for Lutian Machinery and Shenzhen Transsion
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lutian and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Lutian Machinery and Shenzhen Transsion
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.01 times more return on investment than Shenzhen Transsion. However, Lutian Machinery is 1.01 times more volatile than Shenzhen Transsion Holdings. It trades about 0.13 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,410 in Lutian Machinery Co on August 29, 2024 and sell it today you would earn a total of 105.00 from holding Lutian Machinery Co or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Lutian Machinery |
| Shenzhen Transsion |
Lutian Machinery and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Shenzhen Transsion
The main advantage of trading using opposite Lutian Machinery and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Lutian Machinery vs. Winner Medical Co | Lutian Machinery vs. Shengda Mining Co | Lutian Machinery vs. Guangdong Silvere Sci | Lutian Machinery vs. Guocheng Mining Co |
| Shenzhen Transsion vs. Keeson Technology Corp | Shenzhen Transsion vs. Holitech Technology Co | Shenzhen Transsion vs. Qingdao NovelBeam Technology | Shenzhen Transsion vs. Ye Chiu Metal |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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