Correlation Between Loongson Technology and Hunan Investment
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By analyzing existing cross correlation between Loongson Technology Corp and Hunan Investment Group, you can compare the effects of market volatilities on Loongson Technology and Hunan Investment 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 Loongson Technology with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Hunan Investment.
Diversification Opportunities for Loongson Technology and Hunan Investment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and Hunan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Loongson Technology 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 Loongson Technology Corp are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Loongson Technology i.e., Loongson Technology and Hunan Investment go up and down completely randomly.
Pair Corralation between Loongson Technology and Hunan Investment
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 1.59 times more return on investment than Hunan Investment. However, Loongson Technology is 1.59 times more volatile than Hunan Investment Group. It trades about 0.05 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.03 per unit of risk. If you would invest 8,956 in Loongson Technology Corp on September 5, 2024 and sell it today you would earn a total of 6,934 from holding Loongson Technology Corp or generate 77.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Hunan Investment Group
Performance |
| Timeline |
| Loongson Technology Corp |
| Hunan Investment |
Loongson Technology and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Hunan Investment
The main advantage of trading using opposite Loongson Technology and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Loongson Technology vs. Heilongjiang Publishing Media | Loongson Technology vs. Zhejiang Daily Media | Loongson Technology vs. Qtone Education Group | Loongson Technology vs. Thinkingdom Media Group |
| Hunan Investment vs. Cambricon Technologies Corp | Hunan Investment vs. Loongson Technology Corp | Hunan Investment vs. Shenzhen Fortune Trend | Hunan Investment vs. Chongqing Road Bridge |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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