Correlation Between TongFu Microelectronics and Astoria Quality
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By analyzing existing cross correlation between TongFu Microelectronics Co and Astoria Quality Kings, you can compare the effects of market volatilities on TongFu Microelectronics and Astoria Quality 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 Astoria Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of TongFu Microelectronics and Astoria Quality.
Diversification Opportunities for TongFu Microelectronics and Astoria Quality
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TongFu and Astoria is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TongFu Microelectronics Co and Astoria Quality Kings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Quality Kings 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 Astoria Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Quality Kings has no effect on the direction of TongFu Microelectronics i.e., TongFu Microelectronics and Astoria Quality go up and down completely randomly.
Pair Corralation between TongFu Microelectronics and Astoria Quality
Assuming the 90 days trading horizon TongFu Microelectronics Co is expected to generate 4.25 times more return on investment than Astoria Quality. However, TongFu Microelectronics is 4.25 times more volatile than Astoria Quality Kings. It trades about 0.09 of its potential returns per unit of risk. Astoria Quality Kings is currently generating about 0.12 per unit of risk. If you would invest 1,912 in TongFu Microelectronics Co on September 18, 2024 and sell it today you would earn a total of 914.00 from holding TongFu Microelectronics Co or generate 47.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.41% |
| Values | Daily Returns |
TongFu Microelectronics Co vs. Astoria Quality Kings
Performance |
| Timeline |
| TongFu Microelectronics |
| Astoria Quality Kings |
TongFu Microelectronics and Astoria Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TongFu Microelectronics and Astoria Quality
The main advantage of trading using opposite TongFu Microelectronics and Astoria Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TongFu Microelectronics position performs unexpectedly, Astoria Quality 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 Astoria Quality will offset losses from the drop in Astoria Quality's long position.The idea behind TongFu Microelectronics Co and Astoria Quality Kings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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