Correlation Between China Sports and Luyin Investment
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By analyzing existing cross correlation between China Sports Industry and Luyin Investment Group, you can compare the effects of market volatilities on China Sports and Luyin Investment 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 China Sports with a short position of Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Luyin Investment.
Diversification Opportunities for China Sports and Luyin Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Luyin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment and China Sports 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 China Sports Industry are associated (or correlated) with Luyin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luyin Investment has no effect on the direction of China Sports i.e., China Sports and Luyin Investment go up and down completely randomly.
Pair Corralation between China Sports and Luyin Investment
Assuming the 90 days trading horizon China Sports Industry is expected to generate 1.3 times more return on investment than Luyin Investment. However, China Sports is 1.3 times more volatile than Luyin Investment Group. It trades about 0.13 of its potential returns per unit of risk. Luyin Investment Group is currently generating about 0.12 per unit of risk. If you would invest 704.00 in China Sports Industry on September 25, 2024 and sell it today you would earn a total of 156.00 from holding China Sports Industry or generate 22.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Sports Industry vs. Luyin Investment Group
Performance |
Timeline |
China Sports Industry |
Luyin Investment |
China Sports and Luyin Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Sports and Luyin Investment
The main advantage of trading using opposite China Sports and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports position performs unexpectedly, Luyin Investment 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 Luyin Investment will offset losses from the drop in Luyin Investment's long position.China Sports vs. Qingdao Foods Co | China Sports vs. Shandong Sinoglory Health | China Sports vs. Guilin Seamild Foods | China Sports vs. Zhejiang Huatong Meat |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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