Correlation Between Luyin Investment and Sailun Jinyu

Can any of the company-specific risk be diversified away by investing in both Luyin Investment and Sailun Jinyu 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 Sailun Jinyu 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 Sailun Jinyu Group, you can compare the effects of market volatilities on Luyin Investment and Sailun Jinyu 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 Sailun Jinyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luyin Investment and Sailun Jinyu.

Diversification Opportunities for Luyin Investment and Sailun Jinyu

0.0

Correlation Coefficient

Luyin Investment  Sailun Jinyu

Pay attention - limited upside

The 3 months correlation between Luyin and Sailun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luyin Investment Group and Sailun Jinyu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sailun Jinyu Group 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 Sailun Jinyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sailun Jinyu Group has no effect on the direction of Luyin Investment i.e., Luyin Investment and Sailun Jinyu go up and down completely randomly.

Pair Corralation between Luyin Investment and Sailun Jinyu

If you would invest  579.00  in Luyin Investment Group on October 25, 2024 and sell it today you would earn a total of  9.00  from holding Luyin Investment Group or generate 1.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Luyin Investment Group  vs.  Sailun Jinyu Group

Luyin Investment

Risk-Adjusted Performance

1 of 100

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.

Sailun Jinyu Group

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Sailun Jinyu Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sailun Jinyu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Luyin Investment and Sailun Jinyu

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

The idea behind Luyin Investment Group and Sailun Jinyu Group 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..