Correlation Between Runjian Communication and Thinkon Semiconductor
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By analyzing existing cross correlation between Runjian Communication Co and Thinkon Semiconductor Jinzhou, you can compare the effects of market volatilities on Runjian Communication and Thinkon 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 Runjian Communication with a short position of Thinkon Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Thinkon Semiconductor.
Diversification Opportunities for Runjian Communication and Thinkon Semiconductor
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Runjian and Thinkon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Thinkon Semiconductor Jinzhou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkon Semiconductor and Runjian Communication 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 Runjian Communication Co are associated (or correlated) with Thinkon Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkon Semiconductor has no effect on the direction of Runjian Communication i.e., Runjian Communication and Thinkon Semiconductor go up and down completely randomly.
Pair Corralation between Runjian Communication and Thinkon Semiconductor
Assuming the 90 days trading horizon Runjian Communication Co is expected to generate 1.48 times more return on investment than Thinkon Semiconductor. However, Runjian Communication is 1.48 times more volatile than Thinkon Semiconductor Jinzhou. It trades about -0.08 of its potential returns per unit of risk. Thinkon Semiconductor Jinzhou is currently generating about -0.25 per unit of risk. If you would invest 3,183 in Runjian Communication Co on October 16, 2024 and sell it today you would lose (234.00) from holding Runjian Communication Co or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. Thinkon Semiconductor Jinzhou
Performance |
| Timeline |
| Runjian Communication |
| Thinkon Semiconductor |
Runjian Communication and Thinkon Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Thinkon Semiconductor
The main advantage of trading using opposite Runjian Communication and Thinkon Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Thinkon 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 Thinkon Semiconductor will offset losses from the drop in Thinkon Semiconductor's long position.The idea behind Runjian Communication Co and Thinkon Semiconductor Jinzhou 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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