Correlation Between Loongson Technology and Suzhou Weizhixiang
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By analyzing existing cross correlation between Loongson Technology Corp and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Loongson Technology and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Suzhou Weizhixiang.
Diversification Opportunities for Loongson Technology and Suzhou Weizhixiang
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loongson and Suzhou is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Loongson Technology i.e., Loongson Technology and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Loongson Technology and Suzhou Weizhixiang
Assuming the 90 days trading horizon Loongson Technology Corp is expected to under-perform the Suzhou Weizhixiang. But the stock apears to be less risky and, when comparing its historical volatility, Loongson Technology Corp is 1.02 times less risky than Suzhou Weizhixiang. The stock trades about -0.14 of its potential returns per unit of risk. The Suzhou Weizhixiang Food is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,346 in Suzhou Weizhixiang Food on November 4, 2024 and sell it today you would lose (30.00) from holding Suzhou Weizhixiang Food or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Loongson Technology Corp |
| Suzhou Weizhixiang Food |
Loongson Technology and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Suzhou Weizhixiang
The main advantage of trading using opposite Loongson Technology and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang'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 |
| Suzhou Weizhixiang vs. China Longyuan Power | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. Guangxi Guiguan Electric | Suzhou Weizhixiang vs. Yantai North Andre |
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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