Correlation Between Changsha Jingjia and TongFu Microelectronics
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By analyzing existing cross correlation between Changsha Jingjia Microelectronics and TongFu Microelectronics Co, you can compare the effects of market volatilities on Changsha Jingjia 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 Changsha Jingjia with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changsha Jingjia and TongFu Microelectronics.
Diversification Opportunities for Changsha Jingjia and TongFu Microelectronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Changsha and TongFu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Changsha Jingjia Microelectron and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Changsha Jingjia 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 Changsha Jingjia Microelectronics 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 Changsha Jingjia i.e., Changsha Jingjia and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Changsha Jingjia and TongFu Microelectronics
Assuming the 90 days trading horizon Changsha Jingjia is expected to generate 4.23 times less return on investment than TongFu Microelectronics. In addition to that, Changsha Jingjia is 1.42 times more volatile than TongFu Microelectronics Co. It trades about 0.03 of its total potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.2 per unit of volatility. If you would invest 2,642 in TongFu Microelectronics Co on November 7, 2024 and sell it today you would earn a total of 188.00 from holding TongFu Microelectronics Co or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changsha Jingjia Microelectron vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Changsha Jingjia Mic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TongFu Microelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Changsha Jingjia and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changsha Jingjia and TongFu Microelectronics
The main advantage of trading using opposite Changsha Jingjia and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changsha Jingjia 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.The idea behind Changsha Jingjia Microelectronics and TongFu Microelectronics Co 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.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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