Correlation Between Luyin Investment and Xiandai Investment
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By analyzing existing cross correlation between Luyin Investment Group and Xiandai Investment Co, you can compare the effects of market volatilities on Luyin Investment and Xiandai 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 Luyin Investment with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luyin Investment and Xiandai Investment.
Diversification Opportunities for Luyin Investment and Xiandai Investment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Luyin and Xiandai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Luyin Investment Group and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Luyin Investment 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 Luyin Investment Group are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Luyin Investment i.e., Luyin Investment and Xiandai Investment go up and down completely randomly.
Pair Corralation between Luyin Investment and Xiandai Investment
Assuming the 90 days trading horizon Luyin Investment is expected to generate 1.01 times less return on investment than Xiandai Investment. But when comparing it to its historical volatility, Luyin Investment Group is 1.1 times less risky than Xiandai Investment. It trades about 0.25 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Xiandai Investment Co on September 13, 2024 and sell it today you would earn a total of 131.00 from holding Xiandai Investment Co or generate 38.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Luyin Investment Group vs. Xiandai Investment Co
Performance |
Timeline |
Luyin Investment |
Xiandai Investment |
Luyin Investment and Xiandai Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luyin Investment and Xiandai Investment
The main advantage of trading using opposite Luyin Investment and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luyin Investment position performs unexpectedly, Xiandai 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.Luyin Investment vs. Zijin Mining Group | Luyin Investment vs. Wanhua Chemical Group | Luyin Investment vs. Baoshan Iron Steel | Luyin Investment vs. Shandong Gold Mining |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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