Correlation Between Loongson Technology and Kunwu Jiuding
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By analyzing existing cross correlation between Loongson Technology Corp and Kunwu Jiuding Investment, you can compare the effects of market volatilities on Loongson Technology and Kunwu Jiuding 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 Kunwu Jiuding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Kunwu Jiuding.
Diversification Opportunities for Loongson Technology and Kunwu Jiuding
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loongson and Kunwu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Kunwu Jiuding Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunwu Jiuding Investment 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 Kunwu Jiuding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunwu Jiuding Investment has no effect on the direction of Loongson Technology i.e., Loongson Technology and Kunwu Jiuding go up and down completely randomly.
Pair Corralation between Loongson Technology and Kunwu Jiuding
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 0.97 times more return on investment than Kunwu Jiuding. However, Loongson Technology Corp is 1.04 times less risky than Kunwu Jiuding. It trades about 0.05 of its potential returns per unit of risk. Kunwu Jiuding Investment is currently generating about 0.02 per unit of risk. If you would invest 9,927 in Loongson Technology Corp on August 26, 2024 and sell it today you would earn a total of 4,551 from holding Loongson Technology Corp or generate 45.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Kunwu Jiuding Investment
Performance |
| Timeline |
| Loongson Technology Corp |
| Kunwu Jiuding Investment |
Loongson Technology and Kunwu Jiuding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Kunwu Jiuding
The main advantage of trading using opposite Loongson Technology and Kunwu Jiuding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Kunwu Jiuding 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 Kunwu Jiuding will offset losses from the drop in Kunwu Jiuding'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 |
| Kunwu Jiuding vs. New China Life | Kunwu Jiuding vs. Ming Yang Smart | Kunwu Jiuding vs. 159681 | Kunwu Jiuding vs. 159005 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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