Correlation Between Loctek Ergonomic and 516220
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By analyzing existing cross correlation between Loctek Ergonomic Technology and 516220, you can compare the effects of market volatilities on Loctek Ergonomic and 516220 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 516220. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and 516220.
Diversification Opportunities for Loctek Ergonomic and 516220
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loctek and 516220 is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and 516220 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 516220 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 516220. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 516220 has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and 516220 go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and 516220
Assuming the 90 days trading horizon Loctek Ergonomic Technology is expected to generate 1.91 times more return on investment than 516220. However, Loctek Ergonomic is 1.91 times more volatile than 516220. It trades about 0.03 of its potential returns per unit of risk. 516220 is currently generating about -0.03 per unit of risk. If you would invest 1,298 in Loctek Ergonomic Technology on August 24, 2024 and sell it today you would earn a total of 372.00 from holding Loctek Ergonomic Technology or generate 28.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loctek Ergonomic Technology vs. 516220
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| 516220 |
Loctek Ergonomic and 516220 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and 516220
The main advantage of trading using opposite Loctek Ergonomic and 516220 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, 516220 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 516220 will offset losses from the drop in 516220's long position.| Loctek Ergonomic vs. Success Electronics | Loctek Ergonomic vs. Puyang Huicheng Electronic | Loctek Ergonomic vs. Integrated Electronic Systems | Loctek Ergonomic vs. Hangzhou Weiguang Electronic |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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