Correlation Between Lumia and Soochow Suzhou
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By analyzing existing cross correlation between Lumia and Soochow Suzhou Industrial, you can compare the effects of market volatilities on Lumia and Soochow Suzhou 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 Lumia with a short position of Soochow Suzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Soochow Suzhou.
Diversification Opportunities for Lumia and Soochow Suzhou
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lumia and Soochow is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Soochow Suzhou Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soochow Suzhou Industrial and Lumia 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 Lumia are associated (or correlated) with Soochow Suzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soochow Suzhou Industrial has no effect on the direction of Lumia i.e., Lumia and Soochow Suzhou go up and down completely randomly.
Pair Corralation between Lumia and Soochow Suzhou
Assuming the 90 days trading horizon Lumia is expected to under-perform the Soochow Suzhou. In addition to that, Lumia is 7.22 times more volatile than Soochow Suzhou Industrial. It trades about -0.34 of its total potential returns per unit of risk. Soochow Suzhou Industrial is currently generating about 0.47 per unit of volatility. If you would invest 336.00 in Soochow Suzhou Industrial on October 29, 2024 and sell it today you would earn a total of 25.00 from holding Soochow Suzhou Industrial or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumia vs. Soochow Suzhou Industrial
Performance |
| Timeline |
| Lumia |
| Soochow Suzhou Industrial |
Lumia and Soochow Suzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Soochow Suzhou
The main advantage of trading using opposite Lumia and Soochow Suzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Soochow Suzhou 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 Soochow Suzhou will offset losses from the drop in Soochow Suzhou's long position.The idea behind Lumia and Soochow Suzhou Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Soochow Suzhou vs. Hua Xia Bank | Soochow Suzhou vs. King Strong New Material | Soochow Suzhou vs. Konfoong Materials International | Soochow Suzhou vs. Ping An Insurance |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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