Correlation Between Lumia and Guangdong Skychem
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By analyzing existing cross correlation between Lumia and Guangdong Skychem Technology, you can compare the effects of market volatilities on Lumia and Guangdong Skychem 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 Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Guangdong Skychem.
Diversification Opportunities for Lumia and Guangdong Skychem
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lumia and Guangdong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Lumia i.e., Lumia and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Lumia and Guangdong Skychem
Assuming the 90 days trading horizon Lumia is expected to generate 10.14 times more return on investment than Guangdong Skychem. However, Lumia is 10.14 times more volatile than Guangdong Skychem Technology. It trades about 0.04 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.05 per unit of risk. If you would invest 0.00 in Lumia on October 16, 2024 and sell it today you would earn a total of 108.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.46% |
| Values | Daily Returns |
Lumia vs. Guangdong Skychem Technology
Performance |
| Timeline |
| Lumia |
| Guangdong Skychem |
Lumia and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Guangdong Skychem
The main advantage of trading using opposite Lumia and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.The idea behind Lumia and Guangdong Skychem Technology 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.| Guangdong Skychem vs. Kunwu Jiuding Investment | Guangdong Skychem vs. Xiandai Investment Co | Guangdong Skychem vs. Hubei Geoway Investment | Guangdong Skychem vs. Henan Shuanghui Investment |
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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