Correlation Between Lutian Machinery and Jiangxi JDL
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By analyzing existing cross correlation between Lutian Machinery Co and Jiangxi JDL Environmental, you can compare the effects of market volatilities on Lutian Machinery and Jiangxi JDL 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 Jiangxi JDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Jiangxi JDL.
Diversification Opportunities for Lutian Machinery and Jiangxi JDL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lutian and Jiangxi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Jiangxi JDL Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi JDL 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 Jiangxi JDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi JDL Environmental has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Jiangxi JDL go up and down completely randomly.
Pair Corralation between Lutian Machinery and Jiangxi JDL
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 1.44 times more return on investment than Jiangxi JDL. However, Lutian Machinery is 1.44 times more volatile than Jiangxi JDL Environmental. It trades about 0.11 of its potential returns per unit of risk. Jiangxi JDL Environmental is currently generating about 0.05 per unit of risk. If you would invest 1,557 in Lutian Machinery Co on December 4, 2024 and sell it today you would earn a total of 52.00 from holding Lutian Machinery Co or generate 3.34% 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. Jiangxi JDL Environmental
Performance |
| Timeline |
| Lutian Machinery |
| Jiangxi JDL Environmental |
Lutian Machinery and Jiangxi JDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Jiangxi JDL
The main advantage of trading using opposite Lutian Machinery and Jiangxi JDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Jiangxi JDL 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 Jiangxi JDL will offset losses from the drop in Jiangxi JDL's long position.| Lutian Machinery vs. Guosheng Financial Holding | Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Lecron Energy Saving | Lutian Machinery vs. Anhui Gujing Distillery |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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