Correlation Between TongFu Microelectronics and Shandong Hongchuang
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By analyzing existing cross correlation between TongFu Microelectronics Co and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on TongFu Microelectronics and Shandong Hongchuang 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 TongFu Microelectronics with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Shandong Hongchuang.
Diversification Opportunities for TongFu Microelectronics and Shandong Hongchuang
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TongFu and Shandong is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and TongFu Microelectronics 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 TongFu Microelectronics Co are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Shandong Hongchuang
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to under-perform the Shandong Hongchuang. But the stock apears to be less risky and, when comparing its historical volatility, TongFu Microelectronics Co is 1.33 times less risky than Shandong Hongchuang. The stock trades about -0.16 of its potential returns per unit of risk. The Shandong Hongchuang Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Shandong Hongchuang Aluminum on October 30, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| TongFu Microelectronics |
| Shandong Hongchuang |
TongFu Microelectronics and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Shandong Hongchuang
The main advantage of trading using opposite TongFu Microelectronics and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| TongFu Microelectronics vs. Shuhua Sports Co | TongFu Microelectronics vs. Guangdong Wens Foodstuff | TongFu Microelectronics vs. Guilin Seamild Foods | TongFu Microelectronics vs. Anji Foodstuff 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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