Correlation Between China Securities and Loongson Technology
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By analyzing existing cross correlation between China Securities 800 and Loongson Technology Corp, you can compare the effects of market volatilities on China Securities and Loongson Technology 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 China Securities with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Loongson Technology.
Diversification Opportunities for China Securities and Loongson Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Loongson is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Loongson Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loongson Technology Corp and China Securities 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 China Securities 800 are associated (or correlated) with Loongson Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loongson Technology Corp has no effect on the direction of China Securities i.e., China Securities and Loongson Technology go up and down completely randomly.
Pair Corralation between China Securities and Loongson Technology
Assuming the 90 days trading horizon China Securities is expected to generate 40.8 times less return on investment than Loongson Technology. But when comparing it to its historical volatility, China Securities 800 is 2.87 times less risky than Loongson Technology. It trades about 0.01 of its potential returns per unit of risk. Loongson Technology Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 13,762 in Loongson Technology Corp on September 1, 2024 and sell it today you would earn a total of 2,758 from holding Loongson Technology Corp or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Loongson Technology Corp
Performance |
| Timeline |
China Securities and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Loongson Technology Corp
Pair trading matchups for Loongson Technology
Pair Trading with China Securities and Loongson Technology
The main advantage of trading using opposite China Securities and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Loongson Technology 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 Loongson Technology will offset losses from the drop in Loongson Technology's long position.| China Securities vs. Everjoy Health Group | China Securities vs. Fuzhou Rockchip Electronics | China Securities vs. Hangzhou Prevail Optoelectronic | China Securities vs. Aurora Optoelectronics Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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