Correlation Between Hunan Investment and StarPower Semiconductor
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By analyzing existing cross correlation between Hunan Investment Group and StarPower Semiconductor, you can compare the effects of market volatilities on Hunan Investment and StarPower Semiconductor 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 Hunan Investment with a short position of StarPower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and StarPower Semiconductor.
Diversification Opportunities for Hunan Investment and StarPower Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and StarPower is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and StarPower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StarPower Semiconductor and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with StarPower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StarPower Semiconductor has no effect on the direction of Hunan Investment i.e., Hunan Investment and StarPower Semiconductor go up and down completely randomly.
Pair Corralation between Hunan Investment and StarPower Semiconductor
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 0.77 times more return on investment than StarPower Semiconductor. However, Hunan Investment Group is 1.31 times less risky than StarPower Semiconductor. It trades about 0.03 of its potential returns per unit of risk. StarPower Semiconductor is currently generating about -0.04 per unit of risk. If you would invest 561.00 in Hunan Investment Group on September 14, 2024 and sell it today you would earn a total of 54.00 from holding Hunan Investment Group or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. StarPower Semiconductor
Performance |
| Timeline |
| Hunan Investment |
| StarPower Semiconductor |
Hunan Investment and StarPower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and StarPower Semiconductor
The main advantage of trading using opposite Hunan Investment and StarPower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, StarPower Semiconductor 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 StarPower Semiconductor will offset losses from the drop in StarPower Semiconductor's long position.| Hunan Investment vs. Kweichow Moutai Co | Hunan Investment vs. Jiangsu Pacific Quartz | Hunan Investment vs. Shenzhen Transsion Holdings | Hunan Investment vs. Beijing Roborock 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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