Correlation Between Leyard Optoelectronic and Xiamen Insight
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By analyzing existing cross correlation between Leyard Optoelectronic and Xiamen Insight Investment, you can compare the effects of market volatilities on Leyard Optoelectronic and Xiamen Insight 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 Leyard Optoelectronic with a short position of Xiamen Insight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyard Optoelectronic and Xiamen Insight.
Diversification Opportunities for Leyard Optoelectronic and Xiamen Insight
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leyard and Xiamen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Leyard Optoelectronic and Xiamen Insight Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Insight Investment and Leyard Optoelectronic 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 Leyard Optoelectronic are associated (or correlated) with Xiamen Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Insight Investment has no effect on the direction of Leyard Optoelectronic i.e., Leyard Optoelectronic and Xiamen Insight go up and down completely randomly.
Pair Corralation between Leyard Optoelectronic and Xiamen Insight
Assuming the 90 days trading horizon Leyard Optoelectronic is expected to under-perform the Xiamen Insight. In addition to that, Leyard Optoelectronic is 2.0 times more volatile than Xiamen Insight Investment. It trades about -0.07 of its total potential returns per unit of risk. Xiamen Insight Investment is currently generating about -0.09 per unit of volatility. If you would invest 4,274 in Xiamen Insight Investment on October 25, 2024 and sell it today you would lose (194.00) from holding Xiamen Insight Investment or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leyard Optoelectronic vs. Xiamen Insight Investment
Performance |
| Timeline |
| Leyard Optoelectronic |
| Xiamen Insight Investment |
Leyard Optoelectronic and Xiamen Insight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyard Optoelectronic and Xiamen Insight
The main advantage of trading using opposite Leyard Optoelectronic and Xiamen Insight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyard Optoelectronic position performs unexpectedly, Xiamen Insight 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 Xiamen Insight will offset losses from the drop in Xiamen Insight's long position.The idea behind Leyard Optoelectronic and Xiamen Insight Investment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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