Correlation Between Anhui Huaheng and Lutian Machinery
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Lutian Machinery Co, you can compare the effects of market volatilities on Anhui Huaheng 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 Anhui Huaheng with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Lutian Machinery.
Diversification Opportunities for Anhui Huaheng and Lutian Machinery
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anhui and Lutian is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Anhui Huaheng 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 Anhui Huaheng Biotechnology 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 Anhui Huaheng i.e., Anhui Huaheng and Lutian Machinery go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Lutian Machinery
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Lutian Machinery. In addition to that, Anhui Huaheng is 1.53 times more volatile than Lutian Machinery Co. It trades about -0.06 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about -0.01 per unit of volatility. If you would invest 1,852 in Lutian Machinery Co on October 16, 2024 and sell it today you would lose (378.00) from holding Lutian Machinery Co or give up 20.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Lutian Machinery Co
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Lutian Machinery |
Anhui Huaheng and Lutian Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Lutian Machinery
The main advantage of trading using opposite Anhui Huaheng and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng 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.| Anhui Huaheng vs. Semiconductor Manufacturing Intl | Anhui Huaheng vs. Giantec Semiconductor Corp | Anhui Huaheng vs. GRINM Semiconductor Materials | Anhui Huaheng vs. GigaDevice SemiconductorBeiji |
| Lutian Machinery vs. Anhui Huaheng Biotechnology | Lutian Machinery vs. Everjoy Health Group | Lutian Machinery vs. Lotus Health Group | Lutian Machinery vs. Heren Health 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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