Correlation Between Lutian Machinery and Leaguer Shenzhen
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By analyzing existing cross correlation between Lutian Machinery Co and Leaguer Shenzhen MicroElectronics, you can compare the effects of market volatilities on Lutian Machinery and Leaguer Shenzhen 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 Leaguer Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Leaguer Shenzhen.
Diversification Opportunities for Lutian Machinery and Leaguer Shenzhen
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lutian and Leaguer is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Leaguer Shenzhen MicroElectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaguer Shenzhen Mic 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 Leaguer Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaguer Shenzhen Mic has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Leaguer Shenzhen go up and down completely randomly.
Pair Corralation between Lutian Machinery and Leaguer Shenzhen
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.77 times more return on investment than Leaguer Shenzhen. However, Lutian Machinery Co is 1.29 times less risky than Leaguer Shenzhen. It trades about 0.14 of its potential returns per unit of risk. Leaguer Shenzhen MicroElectronics is currently generating about 0.03 per unit of risk. If you would invest 1,431 in Lutian Machinery Co on August 31, 2024 and sell it today you would earn a total of 107.00 from holding Lutian Machinery Co or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Leaguer Shenzhen MicroElectron
Performance |
| Timeline |
| Lutian Machinery |
| Leaguer Shenzhen Mic |
Lutian Machinery and Leaguer Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Leaguer Shenzhen
The main advantage of trading using opposite Lutian Machinery and Leaguer Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Leaguer Shenzhen 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 Leaguer Shenzhen will offset losses from the drop in Leaguer Shenzhen's long position.| Lutian Machinery vs. Cultural Investment Holdings | Lutian Machinery vs. Gome Telecom Equipment | Lutian Machinery vs. Bus Online Co | Lutian Machinery vs. Holitech Technology Co |
| Leaguer Shenzhen vs. Kweichow Moutai Co | Leaguer Shenzhen vs. NAURA Technology Group | Leaguer Shenzhen vs. APT Medical | Leaguer Shenzhen vs. Contemporary Amperex Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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