Correlation Between Loongson Technology and Henan Lantian
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By analyzing existing cross correlation between Loongson Technology Corp and Henan Lantian Gas, you can compare the effects of market volatilities on Loongson Technology and Henan Lantian 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 Henan Lantian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Henan Lantian.
Diversification Opportunities for Loongson Technology and Henan Lantian
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loongson and Henan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Henan Lantian Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Lantian Gas 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 Henan Lantian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Lantian Gas has no effect on the direction of Loongson Technology i.e., Loongson Technology and Henan Lantian go up and down completely randomly.
Pair Corralation between Loongson Technology and Henan Lantian
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 2.13 times more return on investment than Henan Lantian. However, Loongson Technology is 2.13 times more volatile than Henan Lantian Gas. It trades about 0.13 of its potential returns per unit of risk. Henan Lantian Gas is currently generating about -0.17 per unit of risk. If you would invest 13,835 in Loongson Technology Corp on August 29, 2024 and sell it today you would earn a total of 1,444 from holding Loongson Technology Corp or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loongson Technology Corp vs. Henan Lantian Gas
Performance |
| Timeline |
| Loongson Technology Corp |
| Henan Lantian Gas |
Loongson Technology and Henan Lantian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Henan Lantian
The main advantage of trading using opposite Loongson Technology and Henan Lantian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Henan Lantian 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 Henan Lantian will offset losses from the drop in Henan Lantian'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 |
| Henan Lantian vs. Cambricon Technologies Corp | Henan Lantian vs. Loongson Technology Corp | Henan Lantian vs. Chongqing Road Bridge | Henan Lantian vs. Shenzhen Fortune Trend |
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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