Correlation Between Guangdong Fenghua and Nexchip Semiconductor
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By analyzing existing cross correlation between Guangdong Fenghua Advanced and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Guangdong Fenghua and Nexchip 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 Guangdong Fenghua with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Fenghua and Nexchip Semiconductor.
Diversification Opportunities for Guangdong Fenghua and Nexchip Semiconductor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Nexchip is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Fenghua Advanced and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor and Guangdong Fenghua 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 Guangdong Fenghua Advanced are associated (or correlated) with Nexchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexchip Semiconductor has no effect on the direction of Guangdong Fenghua i.e., Guangdong Fenghua and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Guangdong Fenghua and Nexchip Semiconductor
Assuming the 90 days trading horizon Guangdong Fenghua is expected to generate 4.23 times less return on investment than Nexchip Semiconductor. But when comparing it to its historical volatility, Guangdong Fenghua Advanced is 1.73 times less risky than Nexchip Semiconductor. It trades about 0.1 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,448 in Nexchip Semiconductor Corp on September 4, 2024 and sell it today you would earn a total of 1,186 from holding Nexchip Semiconductor Corp or generate 81.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Fenghua Advanced vs. Nexchip Semiconductor Corp
Performance |
| Timeline |
| Guangdong Fenghua |
| Nexchip Semiconductor |
Guangdong Fenghua and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Fenghua and Nexchip Semiconductor
The main advantage of trading using opposite Guangdong Fenghua and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Fenghua position performs unexpectedly, Nexchip 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 Nexchip Semiconductor will offset losses from the drop in Nexchip Semiconductor's long position.| Guangdong Fenghua vs. Nexchip Semiconductor Corp | Guangdong Fenghua vs. Semiconductor Manufacturing Electronics | Guangdong Fenghua vs. Hangzhou Coco Healthcare | Guangdong Fenghua vs. Everjoy Health Group |
| Nexchip Semiconductor vs. Cultural Investment Holdings | Nexchip Semiconductor vs. Gome Telecom Equipment | Nexchip Semiconductor vs. Bus Online Co | Nexchip Semiconductor vs. Holitech Technology Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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