Correlation Between Guilin Seamild and TongFu Microelectronics
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By analyzing existing cross correlation between Guilin Seamild Foods and TongFu Microelectronics Co, you can compare the effects of market volatilities on Guilin Seamild 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 Guilin Seamild with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guilin Seamild and TongFu Microelectronics.
Diversification Opportunities for Guilin Seamild and TongFu Microelectronics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guilin and TongFu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Guilin Seamild Foods and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Guilin Seamild 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 Guilin Seamild Foods 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 Guilin Seamild i.e., Guilin Seamild and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Guilin Seamild and TongFu Microelectronics
Assuming the 90 days trading horizon Guilin Seamild is expected to generate 2.42 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Guilin Seamild Foods is 1.35 times less risky than TongFu Microelectronics. It trades about 0.02 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,143 in TongFu Microelectronics Co on November 7, 2024 and sell it today you would earn a total of 687.00 from holding TongFu Microelectronics Co or generate 32.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guilin Seamild Foods vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Guilin Seamild Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| TongFu Microelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guilin Seamild and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guilin Seamild and TongFu Microelectronics
The main advantage of trading using opposite Guilin Seamild and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guilin Seamild 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.The idea behind Guilin Seamild Foods and TongFu Microelectronics Co 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.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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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