Correlation Between Longmaster Information and Yonyou Auto
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By analyzing existing cross correlation between Longmaster Information Tech and Yonyou Auto Information, you can compare the effects of market volatilities on Longmaster Information and Yonyou Auto 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 Longmaster Information with a short position of Yonyou Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longmaster Information and Yonyou Auto.
Diversification Opportunities for Longmaster Information and Yonyou Auto
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longmaster and Yonyou is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Longmaster Information Tech and Yonyou Auto Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yonyou Auto Information and Longmaster Information 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 Longmaster Information Tech are associated (or correlated) with Yonyou Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yonyou Auto Information has no effect on the direction of Longmaster Information i.e., Longmaster Information and Yonyou Auto go up and down completely randomly.
Pair Corralation between Longmaster Information and Yonyou Auto
Assuming the 90 days trading horizon Longmaster Information Tech is expected to generate 1.42 times more return on investment than Yonyou Auto. However, Longmaster Information is 1.42 times more volatile than Yonyou Auto Information. It trades about 0.02 of its potential returns per unit of risk. Yonyou Auto Information is currently generating about -0.02 per unit of risk. If you would invest 1,483 in Longmaster Information Tech on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Longmaster Information Tech or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longmaster Information Tech vs. Yonyou Auto Information
Performance |
| Timeline |
| Longmaster Information |
| Yonyou Auto Information |
Longmaster Information and Yonyou Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longmaster Information and Yonyou Auto
The main advantage of trading using opposite Longmaster Information and Yonyou Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longmaster Information position performs unexpectedly, Yonyou Auto 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 Yonyou Auto will offset losses from the drop in Yonyou Auto's long position.The idea behind Longmaster Information Tech and Yonyou Auto Information 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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