Correlation Between Loongson Technology and ChengDu Hi
Specify exactly 2 symbols:
By analyzing existing cross correlation between Loongson Technology Corp and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Loongson Technology and ChengDu Hi 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 ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and ChengDu Hi.
Diversification Opportunities for Loongson Technology and ChengDu Hi
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Loongson and ChengDu is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech 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 ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Loongson Technology i.e., Loongson Technology and ChengDu Hi go up and down completely randomly.
Pair Corralation between Loongson Technology and ChengDu Hi
Assuming the 90 days trading horizon Loongson Technology Corp is expected to under-perform the ChengDu Hi. But the stock apears to be less risky and, when comparing its historical volatility, Loongson Technology Corp is 1.5 times less risky than ChengDu Hi. The stock trades about -0.47 of its potential returns per unit of risk. The ChengDu Hi Tech Development is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 5,962 in ChengDu Hi Tech Development on October 6, 2024 and sell it today you would lose (820.00) from holding ChengDu Hi Tech Development or give up 13.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Loongson Technology Corp vs. ChengDu Hi Tech Development
Performance |
Timeline |
Loongson Technology Corp |
ChengDu Hi Tech |
Loongson Technology and ChengDu Hi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Loongson Technology and ChengDu Hi
The main advantage of trading using opposite Loongson Technology and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.The idea behind Loongson Technology Corp and ChengDu Hi Tech Development 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.
ChengDu Hi vs. Dawning Information Industry | ChengDu Hi vs. East Money Information | ChengDu Hi vs. Hangzhou Gisway Information | ChengDu Hi vs. Northking Information 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |