Correlation Between Jiangxi Hengda and TongFu Microelectronics
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and TongFu Microelectronics Co, you can compare the effects of market volatilities on Jiangxi Hengda and TongFu Microelectronics 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 Jiangxi Hengda with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and TongFu Microelectronics.
Diversification Opportunities for Jiangxi Hengda and TongFu Microelectronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangxi and TongFu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Jiangxi Hengda 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 Jiangxi Hengda Hi Tech are associated (or correlated) with TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and TongFu Microelectronics
Assuming the 90 days trading horizon Jiangxi Hengda is expected to generate 5.44 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Jiangxi Hengda Hi Tech is 1.83 times less risky than TongFu Microelectronics. It trades about 0.07 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,329 in TongFu Microelectronics Co on August 25, 2024 and sell it today you would earn a total of 637.00 from holding TongFu Microelectronics Co or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| TongFu Microelectronics |
Jiangxi Hengda and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and TongFu Microelectronics
The main advantage of trading using opposite Jiangxi Hengda and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, TongFu Microelectronics 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 TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
| TongFu Microelectronics vs. Lutian Machinery Co | TongFu Microelectronics vs. China Longyuan Power | TongFu Microelectronics vs. Changshu Tongrun Auto | TongFu Microelectronics vs. PetroChina Co Ltd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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