Correlation Between Yunnan Bowin and Loongson Technology
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By analyzing existing cross correlation between Yunnan Bowin Technology and Loongson Technology Corp, you can compare the effects of market volatilities on Yunnan Bowin 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 Yunnan Bowin with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Bowin and Loongson Technology.
Diversification Opportunities for Yunnan Bowin and Loongson Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Loongson is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Bowin 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 Yunnan Bowin 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 Yunnan Bowin 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 Yunnan Bowin i.e., Yunnan Bowin and Loongson Technology go up and down completely randomly.
Pair Corralation between Yunnan Bowin and Loongson Technology
Assuming the 90 days trading horizon Yunnan Bowin Technology is expected to under-perform the Loongson Technology. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Bowin Technology is 1.88 times less risky than Loongson Technology. The stock trades about -0.06 of its potential returns per unit of risk. The Loongson Technology Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 12,154 in Loongson Technology Corp on December 1, 2024 and sell it today you would earn a total of 1,104 from holding Loongson Technology Corp or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Yunnan Bowin Technology vs. Loongson Technology Corp
Performance |
| Timeline |
| Yunnan Bowin Technology |
| Loongson Technology Corp |
Yunnan Bowin and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Bowin and Loongson Technology
The main advantage of trading using opposite Yunnan Bowin and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Bowin 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.| Yunnan Bowin vs. Xian International Medical | Yunnan Bowin vs. Nanjing Vishee Medical | Yunnan Bowin vs. Kontour Medical Technology | Yunnan Bowin vs. Semiconductor Manufacturing Intl |
| Loongson Technology vs. Chahua Modern Housewares | Loongson Technology vs. Jinsanjiang Silicon Material | Loongson Technology vs. Jahen Household Products | Loongson Technology vs. Fujian Boss Software |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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