Correlation Between Loongson Technology and Hunan Airbluer
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By analyzing existing cross correlation between Loongson Technology Corp and Hunan Airbluer Environmental, you can compare the effects of market volatilities on Loongson Technology and Hunan Airbluer 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 Hunan Airbluer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Hunan Airbluer.
Diversification Opportunities for Loongson Technology and Hunan Airbluer
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and Hunan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Hunan Airbluer Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Airbluer Envir 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 Hunan Airbluer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Airbluer Envir has no effect on the direction of Loongson Technology i.e., Loongson Technology and Hunan Airbluer go up and down completely randomly.
Pair Corralation between Loongson Technology and Hunan Airbluer
Assuming the 90 days trading horizon Loongson Technology is expected to generate 1.39 times less return on investment than Hunan Airbluer. In addition to that, Loongson Technology is 1.23 times more volatile than Hunan Airbluer Environmental. It trades about 0.17 of its total potential returns per unit of risk. Hunan Airbluer Environmental is currently generating about 0.3 per unit of volatility. If you would invest 2,385 in Hunan Airbluer Environmental on August 25, 2024 and sell it today you would earn a total of 2,530 from holding Hunan Airbluer Environmental or generate 106.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.31% |
| Values | Daily Returns |
Loongson Technology Corp vs. Hunan Airbluer Environmental
Performance |
| Timeline |
| Loongson Technology Corp |
| Hunan Airbluer Envir |
Loongson Technology and Hunan Airbluer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Hunan Airbluer
The main advantage of trading using opposite Loongson Technology and Hunan Airbluer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Hunan Airbluer 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 Hunan Airbluer will offset losses from the drop in Hunan Airbluer'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 |
| Hunan Airbluer vs. China Reform Health | Hunan Airbluer vs. Qtone Education Group | Hunan Airbluer vs. By health | Hunan Airbluer vs. Sanbo Hospital 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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