Correlation Between Xinjiang Communications and TongFu Microelectronics
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By analyzing existing cross correlation between Xinjiang Communications Construction and TongFu Microelectronics Co, you can compare the effects of market volatilities on Xinjiang Communications 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 Xinjiang Communications with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and TongFu Microelectronics.
Diversification Opportunities for Xinjiang Communications and TongFu Microelectronics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and TongFu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Xinjiang Communications 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 Xinjiang Communications Construction 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 Xinjiang Communications i.e., Xinjiang Communications and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Xinjiang Communications and TongFu Microelectronics
Assuming the 90 days trading horizon Xinjiang Communications is expected to generate 4.45 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Xinjiang Communications Construction is 1.09 times less risky than TongFu Microelectronics. It trades about 0.01 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,653 in TongFu Microelectronics Co on September 3, 2024 and sell it today you would earn a total of 1,346 from holding TongFu Microelectronics Co or generate 81.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Xinjiang Communications |
| TongFu Microelectronics |
Xinjiang Communications and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and TongFu Microelectronics
The main advantage of trading using opposite Xinjiang Communications and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications 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.| Xinjiang Communications vs. Cultural Investment Holdings | Xinjiang Communications vs. Gome Telecom Equipment | Xinjiang Communications vs. Bus Online Co | Xinjiang Communications vs. Holitech Technology Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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