Correlation Between Loctek Ergonomic and DO Home
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By analyzing existing cross correlation between Loctek Ergonomic Technology and DO Home Collection, you can compare the effects of market volatilities on Loctek Ergonomic and DO Home 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 Loctek Ergonomic with a short position of DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and DO Home.
Diversification Opportunities for Loctek Ergonomic and DO Home
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loctek and 002798 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection and Loctek Ergonomic 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 Loctek Ergonomic Technology are associated (or correlated) with DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and DO Home go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and DO Home
Assuming the 90 days trading horizon Loctek Ergonomic is expected to generate 1.6 times less return on investment than DO Home. But when comparing it to its historical volatility, Loctek Ergonomic Technology is 1.35 times less risky than DO Home. It trades about 0.11 of its potential returns per unit of risk. DO Home Collection is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 347.00 in DO Home Collection on November 7, 2024 and sell it today you would earn a total of 21.00 from holding DO Home Collection or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loctek Ergonomic Technology vs. DO Home Collection
Performance |
| Timeline |
| Loctek Ergonomic Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DO Home Collection |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Loctek Ergonomic and DO Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and DO Home
The main advantage of trading using opposite Loctek Ergonomic and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home's long position.| Loctek Ergonomic vs. Qingdao Hiron Commercial | Loctek Ergonomic vs. Shanghai MG Stationery | Loctek Ergonomic vs. Tungkong |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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