Correlation Between 159681 and Loongson Technology
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By analyzing existing cross correlation between 159681 and Loongson Technology Corp, you can compare the effects of market volatilities on 159681 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 159681 with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Loongson Technology.
Diversification Opportunities for 159681 and Loongson Technology
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 159681 and Loongson is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding 159681 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 159681 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 159681 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 159681 i.e., 159681 and Loongson Technology go up and down completely randomly.
Pair Corralation between 159681 and Loongson Technology
Assuming the 90 days trading horizon 159681 is expected to generate 0.66 times more return on investment than Loongson Technology. However, 159681 is 1.53 times less risky than Loongson Technology. It trades about 0.07 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 95.00 in 159681 on September 27, 2024 and sell it today you would earn a total of 2.00 from holding 159681 or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. Loongson Technology Corp
Performance |
| Timeline |
| 159681 |
| Loongson Technology Corp |
159681 and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Loongson Technology
The main advantage of trading using opposite 159681 and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 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.The idea behind 159681 and Loongson Technology Corp 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.| Loongson Technology vs. Ming Yang Smart | Loongson Technology vs. 159681 | Loongson Technology vs. 159005 | Loongson Technology vs. Loctek Ergonomic Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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