Correlation Between TongFu Microelectronics and Beijing Kingsoft
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By analyzing existing cross correlation between TongFu Microelectronics Co and Beijing Kingsoft Office, you can compare the effects of market volatilities on TongFu Microelectronics and Beijing Kingsoft 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 Beijing Kingsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Beijing Kingsoft.
Diversification Opportunities for TongFu Microelectronics and Beijing Kingsoft
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TongFu and Beijing is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Beijing Kingsoft Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kingsoft Office 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 Beijing Kingsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kingsoft Office has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Beijing Kingsoft go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Beijing Kingsoft
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to under-perform the Beijing Kingsoft. But the stock apears to be less risky and, when comparing its historical volatility, TongFu Microelectronics Co is 1.08 times less risky than Beijing Kingsoft. The stock trades about -0.16 of its potential returns per unit of risk. The Beijing Kingsoft Office is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 29,540 in Beijing Kingsoft Office on October 30, 2024 and sell it today you would earn a total of 1,860 from holding Beijing Kingsoft Office or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Beijing Kingsoft Office
Performance |
| Timeline |
| TongFu Microelectronics |
| Beijing Kingsoft Office |
TongFu Microelectronics and Beijing Kingsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Beijing Kingsoft
The main advantage of trading using opposite TongFu Microelectronics and Beijing Kingsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Beijing Kingsoft 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 Beijing Kingsoft will offset losses from the drop in Beijing Kingsoft's long position.| TongFu Microelectronics vs. Shuhua Sports Co | TongFu Microelectronics vs. Guangdong Wens Foodstuff | TongFu Microelectronics vs. Guilin Seamild Foods | TongFu Microelectronics vs. Anji Foodstuff Co |
| Beijing Kingsoft vs. Allmed Medical Products | Beijing Kingsoft vs. Anji Foodstuff Co | Beijing Kingsoft vs. Namchow Food Group | Beijing Kingsoft vs. HaiXin Foods Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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