Correlation Between Muyuan Foodstuff and TongFu Microelectronics
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By analyzing existing cross correlation between Muyuan Foodstuff Co and TongFu Microelectronics Co, you can compare the effects of market volatilities on Muyuan Foodstuff 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 Muyuan Foodstuff with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and TongFu Microelectronics.
Diversification Opportunities for Muyuan Foodstuff and TongFu Microelectronics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Muyuan and TongFu is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Muyuan Foodstuff 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 Muyuan Foodstuff Co 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 Muyuan Foodstuff i.e., Muyuan Foodstuff and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Muyuan Foodstuff and TongFu Microelectronics
Assuming the 90 days trading horizon Muyuan Foodstuff Co is expected to under-perform the TongFu Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Muyuan Foodstuff Co is 3.05 times less risky than TongFu Microelectronics. The stock trades about -0.22 of its potential returns per unit of risk. The TongFu Microelectronics Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,850 in TongFu Microelectronics Co on October 17, 2024 and sell it today you would lose (23.00) from holding TongFu Microelectronics Co or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muyuan Foodstuff Co vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Muyuan Foodstuff |
| TongFu Microelectronics |
Muyuan Foodstuff and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muyuan Foodstuff and TongFu Microelectronics
The main advantage of trading using opposite Muyuan Foodstuff and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff 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.| Muyuan Foodstuff vs. Guosheng Financial Holding | Muyuan Foodstuff vs. Gansu Huangtai Wine marketing | Muyuan Foodstuff vs. Shenzhen Silver Basis | Muyuan Foodstuff vs. Zijin Mining Group |
| TongFu Microelectronics vs. Shantou Wanshun Package | TongFu Microelectronics vs. Muyuan Foodstuff Co | TongFu Microelectronics vs. Great Sun Foods Co | TongFu Microelectronics vs. Sublime China Information |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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