Correlation Between Loctek Ergonomic and Wuhan Xianglong
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By analyzing existing cross correlation between Loctek Ergonomic Technology and Wuhan Xianglong Power, you can compare the effects of market volatilities on Loctek Ergonomic and Wuhan Xianglong 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 Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and Wuhan Xianglong.
Diversification Opportunities for Loctek Ergonomic and Wuhan Xianglong
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loctek and Wuhan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power 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 Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and Wuhan Xianglong
Assuming the 90 days trading horizon Loctek Ergonomic is expected to generate 4.54 times less return on investment than Wuhan Xianglong. But when comparing it to its historical volatility, Loctek Ergonomic Technology is 1.14 times less risky than Wuhan Xianglong. It trades about 0.01 of its potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,052 in Wuhan Xianglong Power on August 25, 2024 and sell it today you would earn a total of 223.00 from holding Wuhan Xianglong Power or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loctek Ergonomic Technology vs. Wuhan Xianglong Power
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| Wuhan Xianglong Power |
Loctek Ergonomic and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and Wuhan Xianglong
The main advantage of trading using opposite Loctek Ergonomic and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Loctek Ergonomic vs. Xinjiang Baodi Mining | Loctek Ergonomic vs. Minmetals Capital Co | Loctek Ergonomic vs. Tianjin Hi Tech Development | Loctek Ergonomic vs. CITIC Metal Co |
| Wuhan Xianglong vs. Ming Yang Smart | Wuhan Xianglong vs. 159681 | Wuhan Xianglong vs. 159005 | Wuhan Xianglong 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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