Correlation Between Xiandai Investment and GRINM Semiconductor
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By analyzing existing cross correlation between Xiandai Investment Co and GRINM Semiconductor Materials, you can compare the effects of market volatilities on Xiandai Investment and GRINM 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 Xiandai Investment with a short position of GRINM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiandai Investment and GRINM Semiconductor.
Diversification Opportunities for Xiandai Investment and GRINM Semiconductor
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xiandai and GRINM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Xiandai Investment Co and GRINM Semiconductor Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRINM Semiconductor and Xiandai 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 Xiandai Investment Co are associated (or correlated) with GRINM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRINM Semiconductor has no effect on the direction of Xiandai Investment i.e., Xiandai Investment and GRINM Semiconductor go up and down completely randomly.
Pair Corralation between Xiandai Investment and GRINM Semiconductor
Assuming the 90 days trading horizon Xiandai Investment Co is expected to generate 0.83 times more return on investment than GRINM Semiconductor. However, Xiandai Investment Co is 1.21 times less risky than GRINM Semiconductor. It trades about -0.13 of its potential returns per unit of risk. GRINM Semiconductor Materials is currently generating about -0.18 per unit of risk. If you would invest 462.00 in Xiandai Investment Co on October 30, 2024 and sell it today you would lose (40.00) from holding Xiandai Investment Co or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiandai Investment Co vs. GRINM Semiconductor Materials
Performance |
| Timeline |
| Xiandai Investment |
| GRINM Semiconductor |
Xiandai Investment and GRINM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiandai Investment and GRINM Semiconductor
The main advantage of trading using opposite Xiandai Investment and GRINM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiandai Investment position performs unexpectedly, GRINM 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 GRINM Semiconductor will offset losses from the drop in GRINM Semiconductor's long position.The idea behind Xiandai Investment Co and GRINM Semiconductor Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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