Correlation Between Loongson Technology and Guangdong Skychem
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By analyzing existing cross correlation between Loongson Technology Corp and Guangdong Skychem Technology, you can compare the effects of market volatilities on Loongson Technology and Guangdong Skychem 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 Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Guangdong Skychem.
Diversification Opportunities for Loongson Technology and Guangdong Skychem
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loongson and Guangdong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Loongson Technology i.e., Loongson Technology and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Loongson Technology and Guangdong Skychem
Assuming the 90 days trading horizon Loongson Technology is expected to generate 1.58 times less return on investment than Guangdong Skychem. In addition to that, Loongson Technology is 1.04 times more volatile than Guangdong Skychem Technology. It trades about 0.12 of its total potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.19 per unit of volatility. If you would invest 5,221 in Guangdong Skychem Technology on September 26, 2024 and sell it today you would earn a total of 7,234 from holding Guangdong Skychem Technology or generate 138.56% 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. Guangdong Skychem Technology
Performance |
| Timeline |
| Loongson Technology Corp |
| Guangdong Skychem |
Loongson Technology and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loongson Technology and Guangdong Skychem
The main advantage of trading using opposite Loongson Technology and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.| Loongson Technology vs. Ming Yang Smart | Loongson Technology vs. 159681 | Loongson Technology vs. 159005 | Loongson Technology vs. Loctek Ergonomic Technology |
| Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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