Correlation Between Loongson Technology and Jinhe Biotechnology
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By analyzing existing cross correlation between Loongson Technology Corp and Jinhe Biotechnology Co, you can compare the effects of market volatilities on Loongson Technology and Jinhe Biotechnology 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 Jinhe Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Jinhe Biotechnology.
Diversification Opportunities for Loongson Technology and Jinhe Biotechnology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loongson and Jinhe is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology 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 Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of Loongson Technology i.e., Loongson Technology and Jinhe Biotechnology go up and down completely randomly.
Pair Corralation between Loongson Technology and Jinhe Biotechnology
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 1.76 times more return on investment than Jinhe Biotechnology. However, Loongson Technology is 1.76 times more volatile than Jinhe Biotechnology Co. It trades about 0.07 of its potential returns per unit of risk. Jinhe Biotechnology Co is currently generating about 0.08 per unit of risk. If you would invest 9,511 in Loongson Technology Corp on October 26, 2024 and sell it today you would earn a total of 2,659 from holding Loongson Technology Corp or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Jinhe Biotechnology Co
Performance |
| Timeline |
| Loongson Technology Corp |
| Jinhe Biotechnology |
Loongson Technology and Jinhe Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Jinhe Biotechnology
The main advantage of trading using opposite Loongson Technology and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.| Loongson Technology vs. Qingdao Foods Co | Loongson Technology vs. Gan Yuan Foods | Loongson Technology vs. Fibocom Wireless | Loongson Technology vs. New Hope Dairy |
| Jinhe Biotechnology vs. Beingmate Baby Child | Jinhe Biotechnology vs. FSPG Hi Tech Co | Jinhe Biotechnology vs. Zhejiang JIULI Hi tech | Jinhe Biotechnology vs. Heilongjiang Transport Development |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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