Correlation Between Luyin Investment and Risuntek

Can any of the company-specific risk be diversified away by investing in both Luyin Investment and Risuntek at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Luyin Investment and Risuntek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Luyin Investment Group and Risuntek, you can compare the effects of market volatilities on Luyin Investment and Risuntek 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 Risuntek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luyin Investment and Risuntek.

Diversification Opportunities for Luyin Investment and Risuntek

0.69

Correlation Coefficient

Luyin Investment  Risuntek

Poor diversification

The 3 months correlation between Luyin and Risuntek is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Luyin Investment Group and Risuntek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Risuntek 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 Risuntek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Risuntek has no effect on the direction of Luyin Investment i.e., Luyin Investment and Risuntek go up and down completely randomly.

Pair Corralation between Luyin Investment and Risuntek

Assuming the 90 days trading horizon Luyin Investment Group is expected to under-perform the Risuntek. But the stock apears to be less risky and, when comparing its historical volatility, Luyin Investment Group is 1.82 times less risky than Risuntek. The stock trades about 0.0 of its potential returns per unit of risk. The Risuntek is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,005  in Risuntek on October 11, 2024 and sell it today you would earn a total of  203.00  from holding Risuntek or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Luyin Investment Group  vs.  Risuntek

Luyin Investment

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Luyin Investment Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Luyin Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Risuntek

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Risuntek are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Risuntek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Luyin Investment and Risuntek

The main advantage of trading using opposite Luyin Investment and Risuntek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luyin Investment position performs unexpectedly, Risuntek 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 Risuntek will offset losses from the drop in Risuntek's long position.

The idea behind Luyin Investment Group and Risuntek pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.