Correlation Between TongFu Microelectronics and Shandong Polymer
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By analyzing existing cross correlation between TongFu Microelectronics Co and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on TongFu Microelectronics and Shandong Polymer 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 Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Shandong Polymer.
Diversification Opportunities for TongFu Microelectronics and Shandong Polymer
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TongFu and Shandong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio 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 Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Shandong Polymer go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Shandong Polymer
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to generate 1.11 times more return on investment than Shandong Polymer. However, TongFu Microelectronics is 1.11 times more volatile than Shandong Polymer Biochemicals. It trades about -0.05 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.28 per unit of risk. If you would invest 2,850 in TongFu Microelectronics Co on October 16, 2024 and sell it today you would lose (131.00) from holding TongFu Microelectronics Co or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| TongFu Microelectronics |
| Shandong Polymer Bio |
TongFu Microelectronics and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Shandong Polymer
The main advantage of trading using opposite TongFu Microelectronics and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Shandong Polymer 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 Polymer will offset losses from the drop in Shandong Polymer's long position.| TongFu Microelectronics vs. China Life Insurance | TongFu Microelectronics vs. Ningbo Tech Bank Co | TongFu Microelectronics vs. Songz Automobile Air | TongFu Microelectronics vs. Queclink Wireless Solutions |
| Shandong Polymer vs. Shanghai Yaoji Playing | Shandong Polymer vs. Zhejiang JIULI Hi tech | Shandong Polymer vs. Everdisplay Optronics Shanghai | Shandong Polymer vs. Sichuan Jinshi 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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