Correlation Between TongFu Microelectronics and Sino Platinum
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By analyzing existing cross correlation between TongFu Microelectronics Co and Sino Platinum Metals Co, you can compare the effects of market volatilities on TongFu Microelectronics and Sino Platinum 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 Sino Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Sino Platinum.
Diversification Opportunities for TongFu Microelectronics and Sino Platinum
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TongFu and Sino is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Sino Platinum Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Platinum Metals 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 Sino Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Platinum Metals has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Sino Platinum go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Sino Platinum
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to generate 3.1 times more return on investment than Sino Platinum. However, TongFu Microelectronics is 3.1 times more volatile than Sino Platinum Metals Co. It trades about -0.01 of its potential returns per unit of risk. Sino Platinum Metals Co is currently generating about -0.24 per unit of risk. If you would invest 2,850 in TongFu Microelectronics Co on October 15, 2024 and sell it today you would lose (55.00) from holding TongFu Microelectronics Co or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Sino Platinum Metals Co
Performance |
| Timeline |
| TongFu Microelectronics |
| Sino Platinum Metals |
TongFu Microelectronics and Sino Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Sino Platinum
The main advantage of trading using opposite TongFu Microelectronics and Sino Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Sino Platinum 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 Sino Platinum will offset losses from the drop in Sino Platinum's long position.The idea behind TongFu Microelectronics Co and Sino Platinum Metals Co 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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