Correlation Between Shanghai Yanpu and Lutian Machinery
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Lutian Machinery Co, you can compare the effects of market volatilities on Shanghai Yanpu 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 Shanghai Yanpu with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Lutian Machinery.
Diversification Opportunities for Shanghai Yanpu and Lutian Machinery
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Lutian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Shanghai Yanpu 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 Shanghai Yanpu Metal 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 Shanghai Yanpu i.e., Shanghai Yanpu and Lutian Machinery go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Lutian Machinery
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 1.37 times more return on investment than Lutian Machinery. However, Shanghai Yanpu is 1.37 times more volatile than Lutian Machinery Co. It trades about 0.22 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.2 per unit of risk. If you would invest 2,610 in Shanghai Yanpu Metal on September 13, 2024 and sell it today you would earn a total of 1,212 from holding Shanghai Yanpu Metal or generate 46.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Yanpu Metal vs. Lutian Machinery Co
Performance |
Timeline |
Shanghai Yanpu Metal |
Lutian Machinery |
Shanghai Yanpu and Lutian Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Yanpu and Lutian Machinery
The main advantage of trading using opposite Shanghai Yanpu and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu 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.Shanghai Yanpu vs. BeiGene | Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Beijing Roborock Technology | Shanghai Yanpu vs. G bits Network Technology |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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