Correlation Between East Money and Semiconductor Manufacturing
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By analyzing existing cross correlation between East Money Information and Semiconductor Manufacturing Intl, you can compare the effects of market volatilities on East Money and Semiconductor Manufacturing 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 East Money with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Money and Semiconductor Manufacturing.
Diversification Opportunities for East Money and Semiconductor Manufacturing
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between East and Semiconductor is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding East Money Information and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and East Money 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 East Money Information are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of East Money i.e., East Money and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between East Money and Semiconductor Manufacturing
Assuming the 90 days trading horizon East Money is expected to generate 1.25 times less return on investment than Semiconductor Manufacturing. In addition to that, East Money is 1.02 times more volatile than Semiconductor Manufacturing Intl. It trades about 0.05 of its total potential returns per unit of risk. Semiconductor Manufacturing Intl is currently generating about 0.06 per unit of volatility. If you would invest 4,277 in Semiconductor Manufacturing Intl on September 5, 2024 and sell it today you would earn a total of 4,446 from holding Semiconductor Manufacturing Intl or generate 103.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Money Information vs. Semiconductor Manufacturing In
Performance |
| Timeline |
| East Money Information |
| Semiconductor Manufacturing |
East Money and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Money and Semiconductor Manufacturing
The main advantage of trading using opposite East Money and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Money position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| East Money vs. Nantong Haixing Electronics | East Money vs. Shengda Mining Co | East Money vs. Jiangsu Financial Leasing | East Money vs. Shenyang Huitian Thermal |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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