Correlation Between Yuan Longping and Loctek Ergonomic
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By analyzing existing cross correlation between Yuan Longping High tech and Loctek Ergonomic Technology, you can compare the effects of market volatilities on Yuan Longping 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 Yuan Longping with a short position of Loctek Ergonomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Longping and Loctek Ergonomic.
Diversification Opportunities for Yuan Longping and Loctek Ergonomic
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuan and Loctek is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Longping High tech 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 Yuan Longping 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 Yuan Longping High tech 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 Yuan Longping i.e., Yuan Longping and Loctek Ergonomic go up and down completely randomly.
Pair Corralation between Yuan Longping and Loctek Ergonomic
Assuming the 90 days trading horizon Yuan Longping High tech is expected to under-perform the Loctek Ergonomic. But the stock apears to be less risky and, when comparing its historical volatility, Yuan Longping High tech is 1.86 times less risky than Loctek Ergonomic. The stock trades about -0.07 of its potential returns per unit of risk. The Loctek Ergonomic Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,666 in Loctek Ergonomic Technology on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Loctek Ergonomic Technology or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Longping High tech vs. Loctek Ergonomic Technology
Performance |
| Timeline |
| Yuan Longping High |
| Loctek Ergonomic Tec |
Yuan Longping and Loctek Ergonomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Longping and Loctek Ergonomic
The main advantage of trading using opposite Yuan Longping and Loctek Ergonomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Longping 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.| Yuan Longping vs. New China Life | Yuan Longping vs. Ming Yang Smart | Yuan Longping vs. 159681 | Yuan Longping vs. 159005 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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