Correlation Between Bangyan Technology and Lutian Machinery
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By analyzing existing cross correlation between Bangyan Technology Co and Lutian Machinery Co, you can compare the effects of market volatilities on Bangyan Technology 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 Bangyan Technology with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangyan Technology and Lutian Machinery.
Diversification Opportunities for Bangyan Technology and Lutian Machinery
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bangyan and Lutian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bangyan Technology Co and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Bangyan Technology 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 Bangyan Technology Co 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 Bangyan Technology i.e., Bangyan Technology and Lutian Machinery go up and down completely randomly.
Pair Corralation between Bangyan Technology and Lutian Machinery
Assuming the 90 days trading horizon Bangyan Technology is expected to generate 2.64 times less return on investment than Lutian Machinery. In addition to that, Bangyan Technology is 1.97 times more volatile than Lutian Machinery Co. It trades about 0.02 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.11 per unit of volatility. If you would invest 1,208 in Lutian Machinery Co on October 26, 2024 and sell it today you would earn a total of 350.00 from holding Lutian Machinery Co or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangyan Technology Co vs. Lutian Machinery Co
Performance |
| Timeline |
| Bangyan Technology |
| Lutian Machinery |
Bangyan Technology and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangyan Technology and Lutian Machinery
The main advantage of trading using opposite Bangyan Technology and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangyan Technology 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.| Bangyan Technology vs. Bus Online Co | Bangyan Technology vs. Holitech Technology Co | Bangyan Technology vs. Gome Telecom Equipment | Bangyan Technology vs. Cultural Investment Holdings |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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