Correlation Between Loctek Ergonomic and Shenzhen Fortune
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By analyzing existing cross correlation between Loctek Ergonomic Technology and Shenzhen Fortune Trend, you can compare the effects of market volatilities on Loctek Ergonomic and Shenzhen Fortune 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 Shenzhen Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and Shenzhen Fortune.
Diversification Opportunities for Loctek Ergonomic and Shenzhen Fortune
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loctek and Shenzhen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and Shenzhen Fortune Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Fortune Trend 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 Shenzhen Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Fortune Trend has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and Shenzhen Fortune go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and Shenzhen Fortune
Assuming the 90 days trading horizon Loctek Ergonomic is expected to generate 2.06 times less return on investment than Shenzhen Fortune. But when comparing it to its historical volatility, Loctek Ergonomic Technology is 2.52 times less risky than Shenzhen Fortune. It trades about 0.16 of its potential returns per unit of risk. Shenzhen Fortune Trend is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 15,280 in Shenzhen Fortune Trend on September 1, 2024 and sell it today you would earn a total of 2,343 from holding Shenzhen Fortune Trend or generate 15.33% 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. Shenzhen Fortune Trend
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| Shenzhen Fortune Trend |
Loctek Ergonomic and Shenzhen Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and Shenzhen Fortune
The main advantage of trading using opposite Loctek Ergonomic and Shenzhen Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic position performs unexpectedly, Shenzhen Fortune 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 Shenzhen Fortune will offset losses from the drop in Shenzhen Fortune's long position.| Loctek Ergonomic vs. Focus Media Information | Loctek Ergonomic vs. YLZ Information Tech | Loctek Ergonomic vs. Hangzhou Gisway Information | Loctek Ergonomic vs. Yonyou Auto Information |
| Shenzhen Fortune vs. Ming Yang Smart | Shenzhen Fortune vs. 159681 | Shenzhen Fortune vs. 159005 | Shenzhen Fortune 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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