Correlation Between TongFu Microelectronics and Shandong Sino
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By analyzing existing cross correlation between TongFu Microelectronics Co and Shandong Sino Agri United, you can compare the effects of market volatilities on TongFu Microelectronics and Shandong Sino 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 Sino. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Shandong Sino.
Diversification Opportunities for TongFu Microelectronics and Shandong Sino
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TongFu and Shandong is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Shandong Sino Agri United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sino Agri 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 Sino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sino Agri has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Shandong Sino go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Shandong Sino
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to generate 1.03 times more return on investment than Shandong Sino. However, TongFu Microelectronics is 1.03 times more volatile than Shandong Sino Agri United. It trades about 0.03 of its potential returns per unit of risk. Shandong Sino Agri United is currently generating about -0.02 per unit of risk. If you would invest 2,225 in TongFu Microelectronics Co on December 1, 2024 and sell it today you would earn a total of 626.00 from holding TongFu Microelectronics Co or generate 28.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Shandong Sino Agri United
Performance |
| Timeline |
| TongFu Microelectronics |
| Shandong Sino Agri |
TongFu Microelectronics and Shandong Sino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Shandong Sino
The main advantage of trading using opposite TongFu Microelectronics and Shandong Sino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Shandong Sino 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 Sino will offset losses from the drop in Shandong Sino's long position.The idea behind TongFu Microelectronics Co and Shandong Sino Agri United pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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