Correlation Between Levima Advanced and Advanced Technology
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By analyzing existing cross correlation between Levima Advanced Materials and Advanced Technology Materials, you can compare the effects of market volatilities on Levima Advanced and Advanced 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 Levima Advanced with a short position of Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levima Advanced and Advanced Technology.
Diversification Opportunities for Levima Advanced and Advanced Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Levima and Advanced is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Levima Advanced Materials and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology and Levima Advanced 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 Levima Advanced Materials are associated (or correlated) with Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Levima Advanced i.e., Levima Advanced and Advanced Technology go up and down completely randomly.
Pair Corralation between Levima Advanced and Advanced Technology
Assuming the 90 days trading horizon Levima Advanced Materials is expected to under-perform the Advanced Technology. In addition to that, Levima Advanced is 1.09 times more volatile than Advanced Technology Materials. It trades about -0.04 of its total potential returns per unit of risk. Advanced Technology Materials is currently generating about 0.05 per unit of volatility. If you would invest 810.00 in Advanced Technology Materials on August 29, 2024 and sell it today you would earn a total of 404.00 from holding Advanced Technology Materials or generate 49.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levima Advanced Materials vs. Advanced Technology Materials
Performance |
| Timeline |
| Levima Advanced Materials |
| Advanced Technology |
Levima Advanced and Advanced Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levima Advanced and Advanced Technology
The main advantage of trading using opposite Levima Advanced and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levima Advanced position performs unexpectedly, Advanced 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.| Levima Advanced vs. Zijin Mining Group | Levima Advanced vs. Wanhua Chemical Group | Levima Advanced vs. Baoshan Iron Steel | Levima Advanced vs. Shandong Gold Mining |
| Advanced Technology vs. Zijin Mining Group | Advanced Technology vs. Wanhua Chemical Group | Advanced Technology vs. Baoshan Iron Steel | Advanced Technology vs. Shandong Gold Mining |
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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