Correlation Between Loongson Technology and Angang Steel
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By analyzing existing cross correlation between Loongson Technology Corp and Angang Steel Co, you can compare the effects of market volatilities on Loongson Technology and Angang Steel 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 Angang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Angang Steel.
Diversification Opportunities for Loongson Technology and Angang Steel
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loongson and Angang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Angang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angang Steel 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 Angang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angang Steel has no effect on the direction of Loongson Technology i.e., Loongson Technology and Angang Steel go up and down completely randomly.
Pair Corralation between Loongson Technology and Angang Steel
Assuming the 90 days trading horizon Loongson Technology Corp is expected to under-perform the Angang Steel. In addition to that, Loongson Technology is 1.73 times more volatile than Angang Steel Co. It trades about -0.18 of its total potential returns per unit of risk. Angang Steel Co is currently generating about -0.09 per unit of volatility. If you would invest 233.00 in Angang Steel Co on November 3, 2024 and sell it today you would lose (5.00) from holding Angang Steel Co or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Angang Steel Co
Performance |
| Timeline |
| Loongson Technology Corp |
| Angang Steel |
Loongson Technology and Angang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Angang Steel
The main advantage of trading using opposite Loongson Technology and Angang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Angang Steel 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 Angang Steel will offset losses from the drop in Angang Steel's long position.| Loongson Technology vs. New Hope Dairy | Loongson Technology vs. Jiahe Foods Industry | Loongson Technology vs. JCHX Mining Management | Loongson Technology vs. Youyou Foods Co |
| Angang Steel vs. JCHX Mining Management | Angang Steel vs. Tibet Huayu Mining | Angang Steel vs. Hongrun Construction Group | Angang Steel vs. Senci Electric Machinery |
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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