Correlation Between Loongson Technology and Chengdu B-ray
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By analyzing existing cross correlation between Loongson Technology Corp and Chengdu B ray Media, you can compare the effects of market volatilities on Loongson Technology and Chengdu B-ray 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 Chengdu B-ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Chengdu B-ray.
Diversification Opportunities for Loongson Technology and Chengdu B-ray
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loongson and Chengdu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Chengdu B ray Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu B ray 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 Chengdu B-ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu B ray has no effect on the direction of Loongson Technology i.e., Loongson Technology and Chengdu B-ray go up and down completely randomly.
Pair Corralation between Loongson Technology and Chengdu B-ray
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 1.15 times more return on investment than Chengdu B-ray. However, Loongson Technology is 1.15 times more volatile than Chengdu B ray Media. It trades about 0.06 of its potential returns per unit of risk. Chengdu B ray Media is currently generating about 0.04 per unit of risk. If you would invest 7,803 in Loongson Technology Corp on November 3, 2024 and sell it today you would earn a total of 3,885 from holding Loongson Technology Corp or generate 49.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Chengdu B ray Media
Performance |
| Timeline |
| Loongson Technology Corp |
| Chengdu B ray |
Loongson Technology and Chengdu B-ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Chengdu B-ray
The main advantage of trading using opposite Loongson Technology and Chengdu B-ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Chengdu B-ray 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 Chengdu B-ray will offset losses from the drop in Chengdu B-ray's long position.| Loongson Technology vs. New Hope Dairy | Loongson Technology vs. Jiahe Foods Industry | Loongson Technology vs. JCHX Mining Management | Loongson Technology vs. Youyou Foods Co |
| Chengdu B-ray vs. Guangdong Sunwill Precising | Chengdu B-ray vs. Shengda Mining Co | Chengdu B-ray vs. Jilin OLED Material | Chengdu B-ray vs. Malion New Materials |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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