Correlation Between National Silicon and Lutian Machinery
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By analyzing existing cross correlation between National Silicon Industry and Lutian Machinery Co, you can compare the effects of market volatilities on National Silicon 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 National Silicon with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Silicon and Lutian Machinery.
Diversification Opportunities for National Silicon and Lutian Machinery
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Lutian is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding National Silicon Industry and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and National Silicon 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 National Silicon Industry 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 National Silicon i.e., National Silicon and Lutian Machinery go up and down completely randomly.
Pair Corralation between National Silicon and Lutian Machinery
Assuming the 90 days trading horizon National Silicon Industry is expected to generate 2.42 times more return on investment than Lutian Machinery. However, National Silicon is 2.42 times more volatile than Lutian Machinery Co. It trades about 0.08 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.05 per unit of risk. If you would invest 1,898 in National Silicon Industry on August 30, 2024 and sell it today you would earn a total of 248.00 from holding National Silicon Industry or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Silicon Industry vs. Lutian Machinery Co
Performance |
| Timeline |
| National Silicon Industry |
| Lutian Machinery |
National Silicon and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Silicon and Lutian Machinery
The main advantage of trading using opposite National Silicon and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Silicon 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.| National Silicon vs. China State Construction | National Silicon vs. Huafa Industrial Co | National Silicon vs. China International Capital | National Silicon vs. Kweichow Moutai Co |
| Lutian Machinery vs. Winner Medical Co | Lutian Machinery vs. Shengda Mining Co | Lutian Machinery vs. Guangdong Silvere Sci | Lutian Machinery vs. Guocheng Mining Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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