Correlation Between Lontium Semiconductor and Shenzhen SDG
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By analyzing existing cross correlation between Lontium Semiconductor Corp and Shenzhen SDG Information, you can compare the effects of market volatilities on Lontium Semiconductor and Shenzhen SDG 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 Lontium Semiconductor with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lontium Semiconductor and Shenzhen SDG.
Diversification Opportunities for Lontium Semiconductor and Shenzhen SDG
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lontium and Shenzhen is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lontium Semiconductor Corp and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Lontium Semiconductor 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 Lontium Semiconductor Corp are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Lontium Semiconductor i.e., Lontium Semiconductor and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Lontium Semiconductor and Shenzhen SDG
Assuming the 90 days trading horizon Lontium Semiconductor Corp is expected to generate 1.88 times more return on investment than Shenzhen SDG. However, Lontium Semiconductor is 1.88 times more volatile than Shenzhen SDG Information. It trades about 0.14 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about 0.11 per unit of risk. If you would invest 5,895 in Lontium Semiconductor Corp on October 14, 2024 and sell it today you would earn a total of 2,471 from holding Lontium Semiconductor Corp or generate 41.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lontium Semiconductor Corp vs. Shenzhen SDG Information
Performance |
| Timeline |
| Lontium Semiconductor |
| Shenzhen SDG Information |
Lontium Semiconductor and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lontium Semiconductor and Shenzhen SDG
The main advantage of trading using opposite Lontium Semiconductor and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lontium Semiconductor position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG's long position.The idea behind Lontium Semiconductor Corp and Shenzhen SDG Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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