Correlation Between Jiangxi JDL and Lutian Machinery
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By analyzing existing cross correlation between Jiangxi JDL Environmental and Lutian Machinery Co, you can compare the effects of market volatilities on Jiangxi JDL 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 Jiangxi JDL with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi JDL and Lutian Machinery.
Diversification Opportunities for Jiangxi JDL and Lutian Machinery
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and Lutian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi JDL Environmental and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and Jiangxi JDL 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 Jiangxi JDL Environmental 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 Jiangxi JDL i.e., Jiangxi JDL and Lutian Machinery go up and down completely randomly.
Pair Corralation between Jiangxi JDL and Lutian Machinery
Assuming the 90 days trading horizon Jiangxi JDL is expected to generate 1.03 times less return on investment than Lutian Machinery. In addition to that, Jiangxi JDL is 1.13 times more volatile than Lutian Machinery Co. It trades about 0.19 of its total potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.22 per unit of volatility. If you would invest 1,202 in Lutian Machinery Co on September 14, 2024 and sell it today you would earn a total of 400.00 from holding Lutian Machinery Co or generate 33.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.28% |
Values | Daily Returns |
Jiangxi JDL Environmental vs. Lutian Machinery Co
Performance |
Timeline |
Jiangxi JDL Environmental |
Lutian Machinery |
Jiangxi JDL and Lutian Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangxi JDL and Lutian Machinery
The main advantage of trading using opposite Jiangxi JDL and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi JDL 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.Jiangxi JDL vs. Lutian Machinery Co | Jiangxi JDL vs. China Longyuan Power | Jiangxi JDL vs. PetroChina Co Ltd | Jiangxi JDL vs. Bank of China |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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