Correlation Between Ningbo Fangzheng and Loongson Technology
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Loongson Technology Corp, you can compare the effects of market volatilities on Ningbo Fangzheng 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 Ningbo Fangzheng with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Loongson Technology.
Diversification Opportunities for Ningbo Fangzheng and Loongson Technology
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Loongson is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile 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 Ningbo Fangzheng 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 Ningbo Fangzheng Automobile 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 Ningbo Fangzheng i.e., Ningbo Fangzheng and Loongson Technology go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Loongson Technology
Assuming the 90 days trading horizon Ningbo Fangzheng is expected to generate 2.11 times less return on investment than Loongson Technology. But when comparing it to its historical volatility, Ningbo Fangzheng Automobile is 1.18 times less risky than Loongson Technology. It trades about 0.12 of its potential returns per unit of risk. Loongson Technology Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 13,762 in Loongson Technology Corp on September 1, 2024 and sell it today you would earn a total of 2,758 from holding Loongson Technology Corp or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Loongson Technology Corp
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Loongson Technology Corp |
Ningbo Fangzheng and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Loongson Technology
The main advantage of trading using opposite Ningbo Fangzheng and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng 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.| Ningbo Fangzheng vs. Hangzhou Prevail Optoelectronic | Ningbo Fangzheng vs. Xizi Clean Energy | Ningbo Fangzheng vs. AVIC Fund Management | Ningbo Fangzheng vs. Harvest Fund Management |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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