Correlation Between Loongson Technology and Thinkingdom Media
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By analyzing existing cross correlation between Loongson Technology Corp and Thinkingdom Media Group, you can compare the effects of market volatilities on Loongson Technology and Thinkingdom Media 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 Thinkingdom Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Thinkingdom Media.
Diversification Opportunities for Loongson Technology and Thinkingdom Media
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loongson and Thinkingdom is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Thinkingdom Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkingdom Media 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 Thinkingdom Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkingdom Media has no effect on the direction of Loongson Technology i.e., Loongson Technology and Thinkingdom Media go up and down completely randomly.
Pair Corralation between Loongson Technology and Thinkingdom Media
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 1.38 times more return on investment than Thinkingdom Media. However, Loongson Technology is 1.38 times more volatile than Thinkingdom Media Group. It trades about 0.1 of its potential returns per unit of risk. Thinkingdom Media Group is currently generating about 0.13 per unit of risk. If you would invest 14,354 in Loongson Technology Corp on September 3, 2024 and sell it today you would earn a total of 2,166 from holding Loongson Technology Corp or generate 15.09% 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. Thinkingdom Media Group
Performance |
| Timeline |
| Loongson Technology Corp |
| Thinkingdom Media |
Loongson Technology and Thinkingdom Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Thinkingdom Media
The main advantage of trading using opposite Loongson Technology and Thinkingdom Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Thinkingdom Media 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 Thinkingdom Media will offset losses from the drop in Thinkingdom Media's long position.| Loongson Technology vs. Anhui Deli Household | Loongson Technology vs. Der International Home | Loongson Technology vs. Mengtian Home Group | Loongson Technology vs. Guangdong Qunxing Toys |
| Thinkingdom Media vs. Gansu Jiu Steel | Thinkingdom Media vs. Ming Yang Smart | Thinkingdom Media vs. Aba Chemicals Corp | Thinkingdom Media 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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