Correlation Between Ming Yang and Loongson Technology
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By analyzing existing cross correlation between Ming Yang Smart and Loongson Technology Corp, you can compare the effects of market volatilities on Ming Yang 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 Ming Yang with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Yang and Loongson Technology.
Diversification Opportunities for Ming Yang and Loongson Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ming and Loongson is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ming Yang Smart 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 Ming Yang 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 Ming Yang Smart 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 Ming Yang i.e., Ming Yang and Loongson Technology go up and down completely randomly.
Pair Corralation between Ming Yang and Loongson Technology
Assuming the 90 days trading horizon Ming Yang is expected to generate 1.72 times less return on investment than Loongson Technology. But when comparing it to its historical volatility, Ming Yang Smart is 1.44 times less risky than Loongson Technology. It trades about 0.1 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 8,793 in Loongson Technology Corp on September 26, 2024 and sell it today you would earn a total of 5,864 from holding Loongson Technology Corp or generate 66.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Yang Smart vs. Loongson Technology Corp
Performance |
| Timeline |
| Ming Yang Smart |
| Loongson Technology Corp |
Ming Yang and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Yang and Loongson Technology
The main advantage of trading using opposite Ming Yang and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Yang 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.| Ming Yang vs. Healthcare Co | Ming Yang vs. Sanbo Hospital Management | Ming Yang vs. Everjoy Health Group | Ming Yang vs. Huaxia Eye Hospital |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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