Correlation Between Microelectronics and Bin Chuan
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Bin Chuan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microelectronics and Bin Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Bin Chuan Enterprise, you can compare the effects of market volatilities on Microelectronics and Bin Chuan 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 Microelectronics with a short position of Bin Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Bin Chuan.
Diversification Opportunities for Microelectronics and Bin Chuan
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microelectronics and Bin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Bin Chuan Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bin Chuan Enterprise and Microelectronics 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 Microelectronics Technology are associated (or correlated) with Bin Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bin Chuan Enterprise has no effect on the direction of Microelectronics i.e., Microelectronics and Bin Chuan go up and down completely randomly.
Pair Corralation between Microelectronics and Bin Chuan
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the Bin Chuan. But the stock apears to be less risky and, when comparing its historical volatility, Microelectronics Technology is 1.1 times less risky than Bin Chuan. The stock trades about -0.03 of its potential returns per unit of risk. The Bin Chuan Enterprise is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,275 in Bin Chuan Enterprise on September 2, 2024 and sell it today you would earn a total of 4,215 from holding Bin Chuan Enterprise or generate 185.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Bin Chuan Enterprise
Performance |
| Timeline |
| Microelectronics Tec |
| Bin Chuan Enterprise |
Microelectronics and Bin Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Bin Chuan
The main advantage of trading using opposite Microelectronics and Bin Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Bin Chuan 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 Bin Chuan will offset losses from the drop in Bin Chuan's long position.The idea behind Microelectronics Technology and Bin Chuan Enterprise 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.| Bin Chuan vs. Posiflex Technology | Bin Chuan vs. Microelectronics Technology | Bin Chuan vs. Voltronic Power Technology | Bin Chuan vs. HOYA Resort Hotel |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |