Correlation Between Shandong Sino-Agri and TongFu Microelectronics
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By analyzing existing cross correlation between Shandong Sino Agri United and TongFu Microelectronics Co, you can compare the effects of market volatilities on Shandong Sino-Agri 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 Shandong Sino-Agri with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sino-Agri and TongFu Microelectronics.
Diversification Opportunities for Shandong Sino-Agri and TongFu Microelectronics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and TongFu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sino Agri United and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Shandong Sino-Agri 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 Shandong Sino Agri United 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 Shandong Sino-Agri i.e., Shandong Sino-Agri and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Shandong Sino-Agri and TongFu Microelectronics
Assuming the 90 days trading horizon Shandong Sino Agri United is expected to generate 0.7 times more return on investment than TongFu Microelectronics. However, Shandong Sino Agri United is 1.43 times less risky than TongFu Microelectronics. It trades about 0.3 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.11 per unit of risk. If you would invest 1,409 in Shandong Sino Agri United on September 1, 2024 and sell it today you would earn a total of 388.00 from holding Shandong Sino Agri United or generate 27.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sino Agri United vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Shandong Sino Agri |
| TongFu Microelectronics |
Shandong Sino-Agri and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sino-Agri and TongFu Microelectronics
The main advantage of trading using opposite Shandong Sino-Agri and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sino-Agri 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.| Shandong Sino-Agri vs. Zijin Mining Group | Shandong Sino-Agri vs. Wanhua Chemical Group | Shandong Sino-Agri vs. Baoshan Iron Steel | Shandong Sino-Agri vs. Shandong Gold Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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