Correlation Between Loongson Technology and Wuhan Xianglong
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By analyzing existing cross correlation between Loongson Technology Corp and Wuhan Xianglong Power, you can compare the effects of market volatilities on Loongson Technology and Wuhan Xianglong 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 Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Wuhan Xianglong.
Diversification Opportunities for Loongson Technology and Wuhan Xianglong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loongson and Wuhan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power 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 Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Loongson Technology i.e., Loongson Technology and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Loongson Technology and Wuhan Xianglong
Assuming the 90 days trading horizon Loongson Technology is expected to generate 1.51 times less return on investment than Wuhan Xianglong. In addition to that, Loongson Technology is 1.08 times more volatile than Wuhan Xianglong Power. It trades about 0.03 of its total potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.04 per unit of volatility. If you would invest 849.00 in Wuhan Xianglong Power on August 29, 2024 and sell it today you would earn a total of 321.00 from holding Wuhan Xianglong Power or generate 37.81% 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. Wuhan Xianglong Power
Performance |
| Timeline |
| Loongson Technology Corp |
| Wuhan Xianglong Power |
Loongson Technology and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Wuhan Xianglong
The main advantage of trading using opposite Loongson Technology and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong'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 |
| Wuhan Xianglong vs. Ming Yang Smart | Wuhan Xianglong vs. 159681 | Wuhan Xianglong vs. 159005 | Wuhan Xianglong vs. Loctek Ergonomic Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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