Correlation Between Sinosteel Luonai and UE Furniture
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By analyzing existing cross correlation between Sinosteel Luonai Materials and UE Furniture Co, you can compare the effects of market volatilities on Sinosteel Luonai and UE Furniture 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 Sinosteel Luonai with a short position of UE Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and UE Furniture.
Diversification Opportunities for Sinosteel Luonai and UE Furniture
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinosteel and 603600 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai Materials and UE Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UE Furniture and Sinosteel Luonai 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 Sinosteel Luonai Materials are associated (or correlated) with UE Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UE Furniture has no effect on the direction of Sinosteel Luonai i.e., Sinosteel Luonai and UE Furniture go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and UE Furniture
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to under-perform the UE Furniture. In addition to that, Sinosteel Luonai is 1.09 times more volatile than UE Furniture Co. It trades about -0.13 of its total potential returns per unit of risk. UE Furniture Co is currently generating about 0.05 per unit of volatility. If you would invest 1,181 in UE Furniture Co on September 12, 2024 and sell it today you would earn a total of 19.00 from holding UE Furniture Co or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. UE Furniture Co
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| UE Furniture |
Sinosteel Luonai and UE Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and UE Furniture
The main advantage of trading using opposite Sinosteel Luonai and UE Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai position performs unexpectedly, UE Furniture 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 UE Furniture will offset losses from the drop in UE Furniture's long position.| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Rongsheng Petrochemical Co |
| UE Furniture vs. Agricultural Bank of | UE Furniture vs. Industrial and Commercial | UE Furniture vs. Bank of China | UE Furniture vs. PetroChina Co Ltd |
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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