Correlation Between Fuzhou Rockchip and LianChuang Electronic
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By analyzing existing cross correlation between Fuzhou Rockchip Electronics and LianChuang Electronic Technology, you can compare the effects of market volatilities on Fuzhou Rockchip and LianChuang Electronic 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 Fuzhou Rockchip with a short position of LianChuang Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuzhou Rockchip and LianChuang Electronic.
Diversification Opportunities for Fuzhou Rockchip and LianChuang Electronic
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fuzhou and LianChuang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fuzhou Rockchip Electronics and LianChuang Electronic Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianChuang Electronic and Fuzhou Rockchip 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 Fuzhou Rockchip Electronics are associated (or correlated) with LianChuang Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianChuang Electronic has no effect on the direction of Fuzhou Rockchip i.e., Fuzhou Rockchip and LianChuang Electronic go up and down completely randomly.
Pair Corralation between Fuzhou Rockchip and LianChuang Electronic
Assuming the 90 days trading horizon Fuzhou Rockchip Electronics is expected to generate 0.85 times more return on investment than LianChuang Electronic. However, Fuzhou Rockchip Electronics is 1.17 times less risky than LianChuang Electronic. It trades about 0.15 of its potential returns per unit of risk. LianChuang Electronic Technology is currently generating about 0.09 per unit of risk. If you would invest 5,917 in Fuzhou Rockchip Electronics on September 26, 2024 and sell it today you would earn a total of 4,563 from holding Fuzhou Rockchip Electronics or generate 77.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuzhou Rockchip Electronics vs. LianChuang Electronic Technolo
Performance |
| Timeline |
| Fuzhou Rockchip Elec |
| LianChuang Electronic |
Fuzhou Rockchip and LianChuang Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuzhou Rockchip and LianChuang Electronic
The main advantage of trading using opposite Fuzhou Rockchip and LianChuang Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuzhou Rockchip position performs unexpectedly, LianChuang Electronic 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 LianChuang Electronic will offset losses from the drop in LianChuang Electronic's long position.| Fuzhou Rockchip vs. Ming Yang Smart | Fuzhou Rockchip vs. 159681 | Fuzhou Rockchip vs. 159005 | Fuzhou Rockchip vs. Loctek Ergonomic Technology |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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