Correlation Between Loongson Technology and Tieling Newcity
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By analyzing existing cross correlation between Loongson Technology Corp and Tieling Newcity Investment, you can compare the effects of market volatilities on Loongson Technology and Tieling Newcity 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 Tieling Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loongson Technology and Tieling Newcity.
Diversification Opportunities for Loongson Technology and Tieling Newcity
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loongson and Tieling is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Loongson Technology Corp and Tieling Newcity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tieling Newcity Inve 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 Tieling Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tieling Newcity Inve has no effect on the direction of Loongson Technology i.e., Loongson Technology and Tieling Newcity go up and down completely randomly.
Pair Corralation between Loongson Technology and Tieling Newcity
Assuming the 90 days trading horizon Loongson Technology Corp is expected to generate 2.4 times more return on investment than Tieling Newcity. However, Loongson Technology is 2.4 times more volatile than Tieling Newcity Investment. It trades about 0.18 of its potential returns per unit of risk. Tieling Newcity Investment is currently generating about 0.3 per unit of risk. If you would invest 9,510 in Loongson Technology Corp on September 11, 2024 and sell it today you would earn a total of 5,860 from holding Loongson Technology Corp or generate 61.62% 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. Tieling Newcity Investment
Performance |
Timeline |
Loongson Technology Corp |
Tieling Newcity Inve |
Loongson Technology and Tieling Newcity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Loongson Technology and Tieling Newcity
The main advantage of trading using opposite Loongson Technology and Tieling Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loongson Technology position performs unexpectedly, Tieling Newcity 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 Tieling Newcity will offset losses from the drop in Tieling Newcity's long position.Loongson Technology vs. PetroChina Co Ltd | Loongson Technology vs. China Mobile Limited | Loongson Technology vs. CNOOC Limited | Loongson Technology vs. Ping An Insurance |
Tieling Newcity vs. PetroChina Co Ltd | Tieling Newcity vs. China Mobile Limited | Tieling Newcity vs. CNOOC Limited | Tieling Newcity vs. Ping An Insurance |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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