Correlation Between Shenzhen Clou and TongFu Microelectronics
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By analyzing existing cross correlation between Shenzhen Clou Electronics and TongFu Microelectronics Co, you can compare the effects of market volatilities on Shenzhen Clou and TongFu Microelectronics 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 Shenzhen Clou with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and TongFu Microelectronics.
Diversification Opportunities for Shenzhen Clou and TongFu Microelectronics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and TongFu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Shenzhen Clou 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 Shenzhen Clou Electronics are associated (or correlated) with TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Shenzhen Clou and TongFu Microelectronics
Assuming the 90 days trading horizon Shenzhen Clou is expected to generate 2.85 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Shenzhen Clou Electronics is 1.34 times less risky than TongFu Microelectronics. It trades about 0.03 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,349 in TongFu Microelectronics Co on August 31, 2024 and sell it today you would earn a total of 650.00 from holding TongFu Microelectronics Co or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| TongFu Microelectronics |
Shenzhen Clou and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and TongFu Microelectronics
The main advantage of trading using opposite Shenzhen Clou and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, TongFu Microelectronics 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 TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.| Shenzhen Clou vs. Cultural Investment Holdings | Shenzhen Clou vs. Gome Telecom Equipment | Shenzhen Clou vs. Bus Online Co | Shenzhen Clou vs. Holitech Technology Co |
| TongFu Microelectronics vs. Kweichow Moutai Co | TongFu Microelectronics vs. NAURA Technology Group | TongFu Microelectronics vs. APT Medical | TongFu Microelectronics vs. Contemporary Amperex 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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