Correlation Between LianChuang Electronic and Cloud Live
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By analyzing existing cross correlation between LianChuang Electronic Technology and Cloud Live Technology, you can compare the effects of market volatilities on LianChuang Electronic and Cloud Live 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 LianChuang Electronic with a short position of Cloud Live. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianChuang Electronic and Cloud Live.
Diversification Opportunities for LianChuang Electronic and Cloud Live
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LianChuang and Cloud is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LianChuang Electronic Technolo and Cloud Live Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Live Technology and LianChuang Electronic 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 LianChuang Electronic Technology are associated (or correlated) with Cloud Live. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Live Technology has no effect on the direction of LianChuang Electronic i.e., LianChuang Electronic and Cloud Live go up and down completely randomly.
Pair Corralation between LianChuang Electronic and Cloud Live
Assuming the 90 days trading horizon LianChuang Electronic Technology is expected to generate 0.72 times more return on investment than Cloud Live. However, LianChuang Electronic Technology is 1.38 times less risky than Cloud Live. It trades about -0.06 of its potential returns per unit of risk. Cloud Live Technology is currently generating about -0.14 per unit of risk. If you would invest 1,024 in LianChuang Electronic Technology on November 6, 2024 and sell it today you would lose (140.00) from holding LianChuang Electronic Technology or give up 13.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LianChuang Electronic Technolo vs. Cloud Live Technology
Performance |
| Timeline |
| LianChuang Electronic |
| Cloud Live Technology |
LianChuang Electronic and Cloud Live Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianChuang Electronic and Cloud Live
The main advantage of trading using opposite LianChuang Electronic and Cloud Live positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianChuang Electronic position performs unexpectedly, Cloud Live 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 Cloud Live will offset losses from the drop in Cloud Live's long position.The idea behind LianChuang Electronic Technology and Cloud Live Technology 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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