Correlation Between Ningbo Kangqiang and Loongson Technology
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By analyzing existing cross correlation between Ningbo Kangqiang Electronics and Loongson Technology Corp, you can compare the effects of market volatilities on Ningbo Kangqiang 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 Ningbo Kangqiang with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Kangqiang and Loongson Technology.
Diversification Opportunities for Ningbo Kangqiang and Loongson Technology
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ningbo and Loongson is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Kangqiang Electronics 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 Ningbo Kangqiang 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 Ningbo Kangqiang Electronics 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 Ningbo Kangqiang i.e., Ningbo Kangqiang and Loongson Technology go up and down completely randomly.
Pair Corralation between Ningbo Kangqiang and Loongson Technology
Assuming the 90 days trading horizon Ningbo Kangqiang Electronics is expected to generate 2.23 times more return on investment than Loongson Technology. However, Ningbo Kangqiang is 2.23 times more volatile than Loongson Technology Corp. It trades about 0.1 of its potential returns per unit of risk. Loongson Technology Corp is currently generating about -0.11 per unit of risk. If you would invest 1,609 in Ningbo Kangqiang Electronics on November 6, 2024 and sell it today you would earn a total of 104.00 from holding Ningbo Kangqiang Electronics or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Kangqiang Electronics vs. Loongson Technology Corp
Performance |
| Timeline |
| Ningbo Kangqiang Ele |
| Loongson Technology Corp |
Ningbo Kangqiang and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Kangqiang and Loongson Technology
The main advantage of trading using opposite Ningbo Kangqiang and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Kangqiang 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.| Ningbo Kangqiang vs. GRINM Semiconductor Materials | Ningbo Kangqiang vs. XiAn Dagang Road | Ningbo Kangqiang vs. Thinkon Semiconductor Jinzhou | Ningbo Kangqiang vs. Southchip Semiconductor Technology |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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