Correlation Between Loongson Technology and Yes Optoelectronics
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By analyzing existing cross correlation between Loongson Technology Corp and Yes Optoelectronics Co, you can compare the effects of market volatilities on Loongson Technology and Yes Optoelectronics 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 Yes Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Yes Optoelectronics.
Diversification Opportunities for Loongson Technology and Yes Optoelectronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loongson and Yes is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Yes Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yes Optoelectronics 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 Yes Optoelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yes Optoelectronics has no effect on the direction of Loongson Technology i.e., Loongson Technology and Yes Optoelectronics go up and down completely randomly.
Pair Corralation between Loongson Technology and Yes Optoelectronics
Assuming the 90 days trading horizon Loongson Technology is expected to generate 1.05 times less return on investment than Yes Optoelectronics. But when comparing it to its historical volatility, Loongson Technology Corp is 1.06 times less risky than Yes Optoelectronics. It trades about 0.05 of its potential returns per unit of risk. Yes Optoelectronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,563 in Yes Optoelectronics Co on September 26, 2024 and sell it today you would earn a total of 1,061 from holding Yes Optoelectronics Co or generate 67.88% 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. Yes Optoelectronics Co
Performance |
| Timeline |
| Loongson Technology Corp |
| Yes Optoelectronics |
Loongson Technology and Yes Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Yes Optoelectronics
The main advantage of trading using opposite Loongson Technology and Yes Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Yes Optoelectronics 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 Yes Optoelectronics will offset losses from the drop in Yes Optoelectronics' long position.| Loongson Technology vs. Ming Yang Smart | Loongson Technology vs. 159681 | Loongson Technology vs. 159005 | Loongson Technology vs. Loctek Ergonomic Technology |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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