Correlation Between Loongson Technology and Hubeiyichang Transportation
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By analyzing existing cross correlation between Loongson Technology Corp and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Loongson Technology and Hubeiyichang Transportation 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 Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Hubeiyichang Transportation.
Diversification Opportunities for Loongson Technology and Hubeiyichang Transportation
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and Hubeiyichang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation 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 Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Loongson Technology i.e., Loongson Technology and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Loongson Technology and Hubeiyichang Transportation
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 2.22 times more return on investment than Hubeiyichang Transportation. However, Loongson Technology is 2.22 times more volatile than Hubeiyichang Transportation Group. It trades about 0.05 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.01 per unit of risk. If you would invest 8,210 in Loongson Technology Corp on September 12, 2024 and sell it today you would earn a total of 7,006 from holding Loongson Technology Corp or generate 85.33% 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. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Loongson Technology Corp |
| Hubeiyichang Transportation |
Loongson Technology and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Hubeiyichang Transportation
The main advantage of trading using opposite Loongson Technology and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| Loongson Technology vs. Eastern Communications Co | Loongson Technology vs. Huaxia Fund Management | Loongson Technology vs. Allwin Telecommunication Co | Loongson Technology vs. AVIC Fund Management |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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