Correlation Between Cabio Biotech and Lutian Machinery
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Lutian Machinery Co, you can compare the effects of market volatilities on Cabio Biotech and Lutian Machinery 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 Cabio Biotech with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Lutian Machinery.
Diversification Opportunities for Cabio Biotech and Lutian Machinery
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cabio and Lutian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Cabio Biotech 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 Cabio Biotech Wuhan are associated (or correlated) with Lutian Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lutian Machinery has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Lutian Machinery go up and down completely randomly.
Pair Corralation between Cabio Biotech and Lutian Machinery
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to under-perform the Lutian Machinery. In addition to that, Cabio Biotech is 1.77 times more volatile than Lutian Machinery Co. It trades about -0.25 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.08 per unit of volatility. If you would invest 1,569 in Lutian Machinery Co on October 11, 2024 and sell it today you would lose (49.00) from holding Lutian Machinery Co or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Lutian Machinery Co
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| Lutian Machinery |
Cabio Biotech and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Lutian Machinery
The main advantage of trading using opposite Cabio Biotech and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Lutian Machinery 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 Lutian Machinery will offset losses from the drop in Lutian Machinery's long position.| Cabio Biotech vs. Ping An Insurance | Cabio Biotech vs. Maoming Petro Chemical Shihua | Cabio Biotech vs. Guilin Seamild Foods | Cabio Biotech vs. Dymatic Chemicals |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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