Correlation Between Guangdong Shenglu and Union Semiconductor
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Union Semiconductor Co, you can compare the effects of market volatilities on Guangdong Shenglu and Union Semiconductor 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 Guangdong Shenglu with a short position of Union Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Union Semiconductor.
Diversification Opportunities for Guangdong Shenglu and Union Semiconductor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Union is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Union Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Semiconductor and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Union Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Semiconductor has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Union Semiconductor go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Union Semiconductor
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Union Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Shenglu Telecommunication is 1.01 times less risky than Union Semiconductor. The stock trades about -0.03 of its potential returns per unit of risk. The Union Semiconductor Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,147 in Union Semiconductor Co on October 16, 2024 and sell it today you would lose (354.00) from holding Union Semiconductor Co or give up 30.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Union Semiconductor Co
Performance |
| Timeline |
| Guangdong Shenglu |
| Union Semiconductor |
Guangdong Shenglu and Union Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Union Semiconductor
The main advantage of trading using opposite Guangdong Shenglu and Union Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Union Semiconductor 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 Union Semiconductor will offset losses from the drop in Union Semiconductor's long position.| Guangdong Shenglu vs. Hubei Geoway Investment | Guangdong Shenglu vs. Cultural Investment Holdings | Guangdong Shenglu vs. Nuode Investment Co | Guangdong Shenglu vs. Vanfund Urban Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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