Correlation Between Loctek Ergonomic and New China
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By analyzing existing cross correlation between Loctek Ergonomic Technology and New China Life, you can compare the effects of market volatilities on Loctek Ergonomic and New China 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 China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and New China.
Diversification Opportunities for Loctek Ergonomic and New China
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loctek and New is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and New China go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and New China
Assuming the 90 days trading horizon Loctek Ergonomic Technology is expected to generate 1.29 times more return on investment than New China. However, Loctek Ergonomic is 1.29 times more volatile than New China Life. It trades about 0.02 of its potential returns per unit of risk. New China Life is currently generating about 0.02 per unit of risk. If you would invest 1,612 in Loctek Ergonomic Technology on August 26, 2024 and sell it today you would earn a total of 58.00 from holding Loctek Ergonomic Technology or generate 3.6% 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. New China Life
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| New China Life |
Loctek Ergonomic and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and New China
The main advantage of trading using opposite Loctek Ergonomic and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, New China 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 China will offset losses from the drop in New China'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 |
| New China vs. Chongqing Changan Automobile | New China vs. Hubei Dinglong Chemical | New China vs. Lianhe Chemical Technology | New China vs. Sinomach Automobile Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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