Correlation Between TongFu Microelectronics and G Bits
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By analyzing existing cross correlation between TongFu Microelectronics Co and G bits Network Technology, you can compare the effects of market volatilities on TongFu Microelectronics and G Bits 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 G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and G Bits.
Diversification Opportunities for TongFu Microelectronics and G Bits
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TongFu and 603444 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network 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 G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and G Bits go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and G Bits
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to under-perform the G Bits. In addition to that, TongFu Microelectronics is 1.34 times more volatile than G bits Network Technology. It trades about -0.16 of its total potential returns per unit of risk. G bits Network Technology is currently generating about -0.14 per unit of volatility. If you would invest 22,201 in G bits Network Technology on October 9, 2024 and sell it today you would lose (1,473) from holding G bits Network Technology or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. G bits Network Technology
Performance |
| Timeline |
| TongFu Microelectronics |
| G bits Network |
TongFu Microelectronics and G Bits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and G Bits
The main advantage of trading using opposite TongFu Microelectronics and G Bits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, G Bits 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 G Bits will offset losses from the drop in G Bits' long position.The idea behind TongFu Microelectronics Co and G bits Network Technology 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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