Correlation Between Hainan Shuangcheng and Loongson Technology
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By analyzing existing cross correlation between Hainan Shuangcheng Pharmaceut and Loongson Technology Corp, you can compare the effects of market volatilities on Hainan Shuangcheng 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 Hainan Shuangcheng with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Shuangcheng and Loongson Technology.
Diversification Opportunities for Hainan Shuangcheng and Loongson Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Loongson is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Shuangcheng Pharmaceut 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 Hainan Shuangcheng 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 Hainan Shuangcheng Pharmaceut 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 Hainan Shuangcheng i.e., Hainan Shuangcheng and Loongson Technology go up and down completely randomly.
Pair Corralation between Hainan Shuangcheng and Loongson Technology
Assuming the 90 days trading horizon Hainan Shuangcheng Pharmaceut is expected to generate 1.3 times more return on investment than Loongson Technology. However, Hainan Shuangcheng is 1.3 times more volatile than Loongson Technology Corp. It trades about 0.13 of its potential returns per unit of risk. Loongson Technology Corp is currently generating about 0.07 per unit of risk. If you would invest 719.00 in Hainan Shuangcheng Pharmaceut on August 25, 2024 and sell it today you would earn a total of 1,990 from holding Hainan Shuangcheng Pharmaceut or generate 276.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Hainan Shuangcheng Pharmaceut vs. Loongson Technology Corp
Performance |
| Timeline |
| Hainan Shuangcheng |
| Loongson Technology Corp |
Hainan Shuangcheng and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Shuangcheng and Loongson Technology
The main advantage of trading using opposite Hainan Shuangcheng and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Shuangcheng 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.| Hainan Shuangcheng vs. China State Construction | Hainan Shuangcheng vs. Poly Real Estate | Hainan Shuangcheng vs. China Vanke Co | Hainan Shuangcheng vs. China Merchants Shekou |
| Loongson Technology vs. Lutian Machinery Co | Loongson Technology vs. China Longyuan Power | Loongson Technology vs. Changshu Tongrun Auto | Loongson Technology vs. PetroChina Co Ltd |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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