Correlation Between Loongson Technology and BTG Hotels
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By analyzing existing cross correlation between Loongson Technology Corp and BTG Hotels Group, you can compare the effects of market volatilities on Loongson Technology and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and BTG Hotels.
Diversification Opportunities for Loongson Technology and BTG Hotels
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and BTG is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Loongson Technology i.e., Loongson Technology and BTG Hotels go up and down completely randomly.
Pair Corralation between Loongson Technology and BTG Hotels
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 1.76 times more return on investment than BTG Hotels. However, Loongson Technology is 1.76 times more volatile than BTG Hotels Group. It trades about 0.03 of its potential returns per unit of risk. BTG Hotels Group is currently generating about -0.03 per unit of risk. If you would invest 13,950 in Loongson Technology Corp on September 2, 2024 and sell it today you would earn a total of 2,570 from holding Loongson Technology Corp or generate 18.42% 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. BTG Hotels Group
Performance |
| Timeline |
| Loongson Technology Corp |
| BTG Hotels Group |
Loongson Technology and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and BTG Hotels
The main advantage of trading using opposite Loongson Technology and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.| Loongson Technology vs. Xiangyang Automobile Bearing | Loongson Technology vs. Tibet Huayu Mining | Loongson Technology vs. Xinjiang Baodi Mining | Loongson Technology vs. Ye Chiu Metal |
| BTG Hotels vs. Huatian Hotel Group | BTG Hotels vs. Shenzhen Shenbao Industrial | BTG Hotels vs. Hunan Investment Group | BTG Hotels vs. Beijing Mainstreets Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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