Correlation Between Shanghai Yanpu and Loctek Ergonomic
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Loctek Ergonomic Technology, you can compare the effects of market volatilities on Shanghai Yanpu and Loctek Ergonomic 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 Shanghai Yanpu with a short position of Loctek Ergonomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Loctek Ergonomic.
Diversification Opportunities for Shanghai Yanpu and Loctek Ergonomic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Loctek is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Loctek Ergonomic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loctek Ergonomic Tec and Shanghai Yanpu 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 Shanghai Yanpu Metal are associated (or correlated) with Loctek Ergonomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loctek Ergonomic Tec has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Loctek Ergonomic go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Loctek Ergonomic
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.97 times more return on investment than Loctek Ergonomic. However, Shanghai Yanpu Metal is 1.03 times less risky than Loctek Ergonomic. It trades about 0.22 of its potential returns per unit of risk. Loctek Ergonomic Technology is currently generating about 0.13 per unit of risk. If you would invest 2,615 in Shanghai Yanpu Metal on September 12, 2024 and sell it today you would earn a total of 1,272 from holding Shanghai Yanpu Metal or generate 48.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Yanpu Metal vs. Loctek Ergonomic Technology
Performance |
Timeline |
Shanghai Yanpu Metal |
Loctek Ergonomic Tec |
Shanghai Yanpu and Loctek Ergonomic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Yanpu and Loctek Ergonomic
The main advantage of trading using opposite Shanghai Yanpu and Loctek Ergonomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Loctek Ergonomic 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 Loctek Ergonomic will offset losses from the drop in Loctek Ergonomic's long position.Shanghai Yanpu vs. Lutian Machinery Co | Shanghai Yanpu vs. PetroChina Co Ltd | Shanghai Yanpu vs. Bank of China | Shanghai Yanpu vs. Gansu Jiu Steel |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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