Correlation Between Lonkey Industrial and Shaanxi Construction
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By analyzing existing cross correlation between Lonkey Industrial Co and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Lonkey Industrial and Shaanxi Construction 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 Lonkey Industrial with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonkey Industrial and Shaanxi Construction.
Diversification Opportunities for Lonkey Industrial and Shaanxi Construction
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lonkey and Shaanxi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lonkey Industrial Co and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Lonkey Industrial 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 Lonkey Industrial Co are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Lonkey Industrial i.e., Lonkey Industrial and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Lonkey Industrial and Shaanxi Construction
Assuming the 90 days trading horizon Lonkey Industrial Co is expected to under-perform the Shaanxi Construction. But the stock apears to be less risky and, when comparing its historical volatility, Lonkey Industrial Co is 1.5 times less risky than Shaanxi Construction. The stock trades about -0.04 of its potential returns per unit of risk. The Shaanxi Construction Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Shaanxi Construction Machinery on October 7, 2024 and sell it today you would earn a total of 10.00 from holding Shaanxi Construction Machinery or generate 3.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Lonkey Industrial Co vs. Shaanxi Construction Machinery
Performance |
Timeline |
Lonkey Industrial |
Shaanxi Construction |
Lonkey Industrial and Shaanxi Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lonkey Industrial and Shaanxi Construction
The main advantage of trading using opposite Lonkey Industrial and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonkey Industrial position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.Lonkey Industrial vs. Beijing Sanyuan Foods | Lonkey Industrial vs. Beijing Kaiwen Education | Lonkey Industrial vs. Muyuan Foodstuff Co | Lonkey Industrial vs. Chinese Universe Publishing |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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