Correlation Between Leaguer Shenzhen and Ningbo Homelink
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By analyzing existing cross correlation between Leaguer Shenzhen MicroElectronics and Ningbo Homelink Eco iTech, you can compare the effects of market volatilities on Leaguer Shenzhen and Ningbo Homelink 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 Leaguer Shenzhen with a short position of Ningbo Homelink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaguer Shenzhen and Ningbo Homelink.
Diversification Opportunities for Leaguer Shenzhen and Ningbo Homelink
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leaguer and Ningbo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Leaguer Shenzhen MicroElectron and Ningbo Homelink Eco iTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Homelink Eco and Leaguer Shenzhen 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 Leaguer Shenzhen MicroElectronics are associated (or correlated) with Ningbo Homelink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Homelink Eco has no effect on the direction of Leaguer Shenzhen i.e., Leaguer Shenzhen and Ningbo Homelink go up and down completely randomly.
Pair Corralation between Leaguer Shenzhen and Ningbo Homelink
Assuming the 90 days trading horizon Leaguer Shenzhen MicroElectronics is expected to generate 1.37 times more return on investment than Ningbo Homelink. However, Leaguer Shenzhen is 1.37 times more volatile than Ningbo Homelink Eco iTech. It trades about 0.16 of its potential returns per unit of risk. Ningbo Homelink Eco iTech is currently generating about 0.1 per unit of risk. If you would invest 1,945 in Leaguer Shenzhen MicroElectronics on September 25, 2024 and sell it today you would earn a total of 933.00 from holding Leaguer Shenzhen MicroElectronics or generate 47.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Leaguer Shenzhen MicroElectron vs. Ningbo Homelink Eco iTech
Performance |
Timeline |
Leaguer Shenzhen Mic |
Ningbo Homelink Eco |
Leaguer Shenzhen and Ningbo Homelink Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leaguer Shenzhen and Ningbo Homelink
The main advantage of trading using opposite Leaguer Shenzhen and Ningbo Homelink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaguer Shenzhen position performs unexpectedly, Ningbo Homelink 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 Ningbo Homelink will offset losses from the drop in Ningbo Homelink's long position.Leaguer Shenzhen vs. Southchip Semiconductor Technology | Leaguer Shenzhen vs. Shanghai Yanpu Metal | Leaguer Shenzhen vs. GRINM Semiconductor Materials | Leaguer Shenzhen vs. Western Metal Materials |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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