Correlation Between Luolai Home and Panda Financial
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By analyzing existing cross correlation between Luolai Home Textile and Panda Financial Holding, you can compare the effects of market volatilities on Luolai Home and Panda Financial 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 Luolai Home with a short position of Panda Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Panda Financial.
Diversification Opportunities for Luolai Home and Panda Financial
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luolai and Panda is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Panda Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Financial Holding and Luolai Home 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 Luolai Home Textile are associated (or correlated) with Panda Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Financial Holding has no effect on the direction of Luolai Home i.e., Luolai Home and Panda Financial go up and down completely randomly.
Pair Corralation between Luolai Home and Panda Financial
Assuming the 90 days trading horizon Luolai Home Textile is expected to generate 0.55 times more return on investment than Panda Financial. However, Luolai Home Textile is 1.81 times less risky than Panda Financial. It trades about -0.06 of its potential returns per unit of risk. Panda Financial Holding is currently generating about -0.16 per unit of risk. If you would invest 862.00 in Luolai Home Textile on October 12, 2024 and sell it today you would lose (29.00) from holding Luolai Home Textile or give up 3.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Luolai Home Textile vs. Panda Financial Holding
Performance |
Timeline |
Luolai Home Textile |
Panda Financial Holding |
Luolai Home and Panda Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luolai Home and Panda Financial
The main advantage of trading using opposite Luolai Home and Panda Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Panda Financial 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 Panda Financial will offset losses from the drop in Panda Financial's long position.Luolai Home vs. BYD Co Ltd | Luolai Home vs. China Mobile Limited | Luolai Home vs. Agricultural Bank of | Luolai Home vs. Industrial and Commercial |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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