Correlation Between Loctek Ergonomic and New Hope
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By analyzing existing cross correlation between Loctek Ergonomic Technology and New Hope Dairy, you can compare the effects of market volatilities on Loctek Ergonomic and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and New Hope.
Diversification Opportunities for Loctek Ergonomic and New Hope
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loctek and New is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and New Hope go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and New Hope
Assuming the 90 days trading horizon Loctek Ergonomic Technology is expected to generate 1.16 times more return on investment than New Hope. However, Loctek Ergonomic is 1.16 times more volatile than New Hope Dairy. It trades about 0.03 of its potential returns per unit of risk. New Hope Dairy is currently generating about 0.02 per unit of risk. If you would invest 1,222 in Loctek Ergonomic Technology on September 26, 2024 and sell it today you would earn a total of 362.00 from holding Loctek Ergonomic Technology or generate 29.62% 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. New Hope Dairy
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| New Hope Dairy |
Loctek Ergonomic and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and New Hope
The main advantage of trading using opposite Loctek Ergonomic and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Loctek Ergonomic vs. Ming Yang Smart | Loctek Ergonomic vs. 159681 | Loctek Ergonomic vs. 159005 | Loctek Ergonomic vs. Yes Optoelectronics Co |
| New Hope vs. Ming Yang Smart | New Hope vs. 159681 | New Hope vs. 159005 | New Hope 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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