Correlation Between Loongson Technology and Kuang Chi
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By analyzing existing cross correlation between Loongson Technology Corp and Kuang Chi Technologies, you can compare the effects of market volatilities on Loongson Technology and Kuang Chi 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 Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Kuang Chi.
Diversification Opportunities for Loongson Technology and Kuang Chi
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and Kuang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies 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 Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Loongson Technology i.e., Loongson Technology and Kuang Chi go up and down completely randomly.
Pair Corralation between Loongson Technology and Kuang Chi
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 0.85 times more return on investment than Kuang Chi. However, Loongson Technology Corp is 1.17 times less risky than Kuang Chi. It trades about 0.13 of its potential returns per unit of risk. Kuang Chi Technologies is currently generating about -0.07 per unit of risk. If you would invest 13,835 in Loongson Technology Corp on August 29, 2024 and sell it today you would earn a total of 1,444 from holding Loongson Technology Corp or generate 10.44% 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. Kuang Chi Technologies
Performance |
| Timeline |
| Loongson Technology Corp |
| Kuang Chi Technologies |
Loongson Technology and Kuang Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Kuang Chi
The main advantage of trading using opposite Loongson Technology and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.| Loongson Technology vs. Lutian Machinery Co | Loongson Technology vs. China Longyuan Power | Loongson Technology vs. Changshu Tongrun Auto | Loongson Technology vs. PetroChina Co Ltd |
| Kuang Chi vs. Mango Excellent Media | Kuang Chi vs. Chengdu B ray Media | Kuang Chi vs. Omnijoi Media Corp | Kuang Chi vs. Peoples Insurance of |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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