Correlation Between Ingenic Semiconductor and Liaoning Chengda
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By analyzing existing cross correlation between Ingenic Semiconductor and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Ingenic Semiconductor and Liaoning Chengda 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 Ingenic Semiconductor with a short position of Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingenic Semiconductor and Liaoning Chengda.
Diversification Opportunities for Ingenic Semiconductor and Liaoning Chengda
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingenic and Liaoning is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ingenic Semiconductor and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio and Ingenic Semiconductor 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 Ingenic Semiconductor are associated (or correlated) with Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Ingenic Semiconductor i.e., Ingenic Semiconductor and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Ingenic Semiconductor and Liaoning Chengda
Assuming the 90 days trading horizon Ingenic Semiconductor is expected to generate 5.65 times less return on investment than Liaoning Chengda. In addition to that, Ingenic Semiconductor is 1.88 times more volatile than Liaoning Chengda Biotechnology. It trades about 0.01 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about 0.14 per unit of volatility. If you would invest 2,512 in Liaoning Chengda Biotechnology on November 3, 2024 and sell it today you would earn a total of 78.00 from holding Liaoning Chengda Biotechnology or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingenic Semiconductor vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Ingenic Semiconductor |
| Liaoning Chengda Bio |
Ingenic Semiconductor and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingenic Semiconductor and Liaoning Chengda
The main advantage of trading using opposite Ingenic Semiconductor and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingenic Semiconductor position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.The idea behind Ingenic Semiconductor and Liaoning Chengda Biotechnology 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.
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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