Correlation Between Kangyue Technology and TongFu Microelectronics
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By analyzing existing cross correlation between Kangyue Technology Co and TongFu Microelectronics Co, you can compare the effects of market volatilities on Kangyue Technology 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 Kangyue Technology with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangyue Technology and TongFu Microelectronics.
Diversification Opportunities for Kangyue Technology and TongFu Microelectronics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kangyue and TongFu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kangyue Technology Co and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Kangyue Technology 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 Kangyue Technology Co 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 Kangyue Technology i.e., Kangyue Technology and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Kangyue Technology and TongFu Microelectronics
Assuming the 90 days trading horizon Kangyue Technology is expected to generate 4.24 times less return on investment than TongFu Microelectronics. In addition to that, Kangyue Technology is 1.56 times more volatile than TongFu Microelectronics Co. It trades about 0.01 of its total potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.05 per unit of volatility. If you would invest 1,721 in TongFu Microelectronics Co on September 13, 2024 and sell it today you would earn a total of 1,259 from holding TongFu Microelectronics Co or generate 73.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kangyue Technology Co vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Kangyue Technology |
| TongFu Microelectronics |
Kangyue Technology and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kangyue Technology and TongFu Microelectronics
The main advantage of trading using opposite Kangyue Technology and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangyue Technology 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.| Kangyue Technology vs. Cultural Investment Holdings | Kangyue Technology vs. Gome Telecom Equipment | Kangyue Technology vs. Holitech Technology Co | Kangyue Technology vs. Zotye Automobile Co |
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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