Correlation Between TongFu Microelectronics and Zhejiang Construction
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By analyzing existing cross correlation between TongFu Microelectronics Co and Zhejiang Construction Investment, you can compare the effects of market volatilities on TongFu Microelectronics and Zhejiang Construction 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 Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Zhejiang Construction.
Diversification Opportunities for TongFu Microelectronics and Zhejiang Construction
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TongFu and Zhejiang is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Zhejiang Construction go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Zhejiang Construction
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to generate 1.09 times more return on investment than Zhejiang Construction. However, TongFu Microelectronics is 1.09 times more volatile than Zhejiang Construction Investment. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about 0.01 per unit of risk. If you would invest 2,043 in TongFu Microelectronics Co on November 3, 2024 and sell it today you would earn a total of 787.00 from holding TongFu Microelectronics Co or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Zhejiang Construction Investme
Performance |
| Timeline |
| TongFu Microelectronics |
| Zhejiang Construction |
TongFu Microelectronics and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Zhejiang Construction
The main advantage of trading using opposite TongFu Microelectronics and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| TongFu Microelectronics vs. Soyea Technology Co | TongFu Microelectronics vs. Keeson Technology Corp | TongFu Microelectronics vs. Bohai Leasing Co | TongFu Microelectronics vs. Sunny Loan Top |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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