Correlation Between Loctek Ergonomic and Loongson Technology
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By analyzing existing cross correlation between Loctek Ergonomic Technology and Loongson Technology Corp, you can compare the effects of market volatilities on Loctek Ergonomic and Loongson Technology 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 Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and Loongson Technology.
Diversification Opportunities for Loctek Ergonomic and Loongson Technology
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loctek and Loongson is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and Loongson Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loongson Technology Corp 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 Loongson Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loongson Technology Corp has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and Loongson Technology go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and Loongson Technology
Assuming the 90 days trading horizon Loctek Ergonomic is expected to generate 12.43 times less return on investment than Loongson Technology. But when comparing it to its historical volatility, Loctek Ergonomic Technology is 1.53 times less risky than Loongson Technology. It trades about 0.01 of its potential returns per unit of risk. Loongson Technology Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,958 in Loongson Technology Corp on September 27, 2024 and sell it today you would earn a total of 5,699 from holding Loongson Technology Corp or generate 63.62% 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. Loongson Technology Corp
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| Loongson Technology Corp |
Loctek Ergonomic and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and Loongson Technology
The main advantage of trading using opposite Loctek Ergonomic and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, Loongson Technology 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 Loongson Technology will offset losses from the drop in Loongson Technology's long position.| Loctek Ergonomic vs. Heilongjiang Publishing Media | Loctek Ergonomic vs. Quectel Wireless Solutions | Loctek Ergonomic vs. Hengdian Entertainment Co | Loctek Ergonomic vs. Dook Media Group |
| Loongson Technology vs. Ming Yang Smart | Loongson Technology vs. 159681 | Loongson Technology vs. 159005 | Loongson Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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