Correlation Between Digital China and Loctek Ergonomic
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By analyzing existing cross correlation between Digital China Information and Loctek Ergonomic Technology, you can compare the effects of market volatilities on Digital China and Loctek Ergonomic 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 Digital China with a short position of Loctek Ergonomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Loctek Ergonomic.
Diversification Opportunities for Digital China and Loctek Ergonomic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Digital and Loctek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Loctek Ergonomic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loctek Ergonomic Tec and Digital China 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 Digital China Information are associated (or correlated) with Loctek Ergonomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loctek Ergonomic Tec has no effect on the direction of Digital China i.e., Digital China and Loctek Ergonomic go up and down completely randomly.
Pair Corralation between Digital China and Loctek Ergonomic
Assuming the 90 days trading horizon Digital China Information is expected to generate 1.23 times more return on investment than Loctek Ergonomic. However, Digital China is 1.23 times more volatile than Loctek Ergonomic Technology. It trades about 0.18 of its potential returns per unit of risk. Loctek Ergonomic Technology is currently generating about 0.13 per unit of risk. If you would invest 835.00 in Digital China Information on September 3, 2024 and sell it today you would earn a total of 380.00 from holding Digital China Information or generate 45.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital China Information vs. Loctek Ergonomic Technology
Performance |
| Timeline |
| Digital China Information |
| Loctek Ergonomic Tec |
Digital China and Loctek Ergonomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Loctek Ergonomic
The main advantage of trading using opposite Digital China and Loctek Ergonomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Loctek Ergonomic 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 Loctek Ergonomic will offset losses from the drop in Loctek Ergonomic's long position.| Digital China vs. Fujian Rongji Software | Digital China vs. Dongguan Aohai Technology | Digital China vs. Hangzhou Pinming Software | Digital China vs. Vontron Technology Co |
| Loctek Ergonomic vs. Digital China Information | Loctek Ergonomic vs. ButOne Information Corp | Loctek Ergonomic vs. Tianshan Aluminum Group | Loctek Ergonomic vs. Anhui Gujing Distillery |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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