Correlation Between Sichuan Jinshi and TongFu Microelectronics
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By analyzing existing cross correlation between Sichuan Jinshi Technology and TongFu Microelectronics Co, you can compare the effects of market volatilities on Sichuan Jinshi 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 Sichuan Jinshi with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and TongFu Microelectronics.
Diversification Opportunities for Sichuan Jinshi and TongFu Microelectronics
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and TongFu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Sichuan Jinshi 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 Sichuan Jinshi Technology 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 Sichuan Jinshi i.e., Sichuan Jinshi and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and TongFu Microelectronics
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to under-perform the TongFu Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Jinshi Technology is 1.24 times less risky than TongFu Microelectronics. The stock trades about 0.0 of its potential returns per unit of risk. The TongFu Microelectronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,669 in TongFu Microelectronics Co on September 2, 2024 and sell it today you would earn a total of 1,330 from holding TongFu Microelectronics Co or generate 79.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| TongFu Microelectronics |
Sichuan Jinshi and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and TongFu Microelectronics
The main advantage of trading using opposite Sichuan Jinshi and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi 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.| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Wanhua Chemical Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Shandong Gold Mining |
| TongFu Microelectronics vs. Xiwang Foodstuffs Co | TongFu Microelectronics vs. Gome Telecom Equipment | TongFu Microelectronics vs. Great Sun Foods Co | TongFu Microelectronics vs. Dr Peng Telecom |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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