Correlation Between Guangdong Electric and Lontium Semiconductor
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By analyzing existing cross correlation between Guangdong Electric Power and Lontium Semiconductor Corp, you can compare the effects of market volatilities on Guangdong Electric and Lontium 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 Guangdong Electric with a short position of Lontium Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Electric and Lontium Semiconductor.
Diversification Opportunities for Guangdong Electric and Lontium Semiconductor
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guangdong and Lontium is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Electric Power and Lontium Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lontium Semiconductor and Guangdong Electric 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 Guangdong Electric Power are associated (or correlated) with Lontium Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lontium Semiconductor has no effect on the direction of Guangdong Electric i.e., Guangdong Electric and Lontium Semiconductor go up and down completely randomly.
Pair Corralation between Guangdong Electric and Lontium Semiconductor
Assuming the 90 days trading horizon Guangdong Electric Power is expected to under-perform the Lontium Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Electric Power is 4.21 times less risky than Lontium Semiconductor. The stock trades about -0.01 of its potential returns per unit of risk. The Lontium Semiconductor Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,782 in Lontium Semiconductor Corp on October 16, 2024 and sell it today you would earn a total of 2,486 from holding Lontium Semiconductor Corp or generate 43.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.65% |
| Values | Daily Returns |
Guangdong Electric Power vs. Lontium Semiconductor Corp
Performance |
| Timeline |
| Guangdong Electric Power |
| Lontium Semiconductor |
Guangdong Electric and Lontium Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Electric and Lontium Semiconductor
The main advantage of trading using opposite Guangdong Electric and Lontium Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Electric position performs unexpectedly, Lontium 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 Lontium Semiconductor will offset losses from the drop in Lontium Semiconductor's long position.| Guangdong Electric vs. Everdisplay Optronics Shanghai | Guangdong Electric vs. Lontium Semiconductor Corp | Guangdong Electric vs. GRINM Semiconductor Materials | Guangdong Electric vs. Chongqing Brewery Co |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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