Correlation Between China Longyuan and Semiconductor Manufacturing
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By analyzing existing cross correlation between China Longyuan Power and Semiconductor Manufacturing Electronics, you can compare the effects of market volatilities on China Longyuan and Semiconductor Manufacturing 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 China Longyuan with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Semiconductor Manufacturing.
Diversification Opportunities for China Longyuan and Semiconductor Manufacturing
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Semiconductor is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Semiconductor Manufacturing El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and China Longyuan 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 China Longyuan Power are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of China Longyuan i.e., China Longyuan and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between China Longyuan and Semiconductor Manufacturing
Assuming the 90 days trading horizon China Longyuan is expected to generate 2.22 times less return on investment than Semiconductor Manufacturing. But when comparing it to its historical volatility, China Longyuan Power is 1.36 times less risky than Semiconductor Manufacturing. It trades about 0.14 of its potential returns per unit of risk. Semiconductor Manufacturing Electronics is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Semiconductor Manufacturing Electronics on August 25, 2024 and sell it today you would earn a total of 177.00 from holding Semiconductor Manufacturing Electronics or generate 50.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Semiconductor Manufacturing El
Performance |
| Timeline |
| China Longyuan Power |
| Semiconductor Manufacturing |
China Longyuan and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Semiconductor Manufacturing
The main advantage of trading using opposite China Longyuan and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| China Longyuan vs. Youyou Foods Co | China Longyuan vs. Hang Xiao Steel | China Longyuan vs. City Development Environment | China Longyuan vs. Air China Ltd |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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