Correlation Between Hainan Haiqi and Loongson Technology
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Loongson Technology Corp, you can compare the effects of market volatilities on Hainan Haiqi 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 Hainan Haiqi with a short position of Loongson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Loongson Technology.
Diversification Opportunities for Hainan Haiqi and Loongson Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Loongson is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation 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 Hainan Haiqi 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 Hainan Haiqi Transportation 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 Hainan Haiqi i.e., Hainan Haiqi and Loongson Technology go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Loongson Technology
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Loongson Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.4 times less risky than Loongson Technology. The stock trades about 0.0 of its potential returns per unit of risk. The 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 | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Loongson Technology Corp
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Loongson Technology Corp |
Hainan Haiqi and Loongson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Loongson Technology
The main advantage of trading using opposite Hainan Haiqi and Loongson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi 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.| Hainan Haiqi vs. Nanjing Putian Telecommunications | Hainan Haiqi vs. Shenzhen Hifuture Electric | Hainan Haiqi vs. Tianjin Realty Development | Hainan Haiqi vs. Shenyang Huitian Thermal |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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