Correlation Between Shannon Semiconductor and Changchun Engley
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By analyzing existing cross correlation between Shannon Semiconductor Technology and Changchun Engley Automobile, you can compare the effects of market volatilities on Shannon Semiconductor and Changchun Engley 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 Shannon Semiconductor with a short position of Changchun Engley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shannon Semiconductor and Changchun Engley.
Diversification Opportunities for Shannon Semiconductor and Changchun Engley
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shannon and Changchun is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shannon Semiconductor Technolo and Changchun Engley Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Engley Aut and Shannon 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 Shannon Semiconductor Technology are associated (or correlated) with Changchun Engley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Engley Aut has no effect on the direction of Shannon Semiconductor i.e., Shannon Semiconductor and Changchun Engley go up and down completely randomly.
Pair Corralation between Shannon Semiconductor and Changchun Engley
Assuming the 90 days trading horizon Shannon Semiconductor Technology is expected to generate 1.13 times more return on investment than Changchun Engley. However, Shannon Semiconductor is 1.13 times more volatile than Changchun Engley Automobile. It trades about -0.08 of its potential returns per unit of risk. Changchun Engley Automobile is currently generating about -0.11 per unit of risk. If you would invest 3,244 in Shannon Semiconductor Technology on November 6, 2024 and sell it today you would lose (462.00) from holding Shannon Semiconductor Technology or give up 14.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shannon Semiconductor Technolo vs. Changchun Engley Automobile
Performance |
| Timeline |
| Shannon Semiconductor |
| Changchun Engley Aut |
Shannon Semiconductor and Changchun Engley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shannon Semiconductor and Changchun Engley
The main advantage of trading using opposite Shannon Semiconductor and Changchun Engley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shannon Semiconductor position performs unexpectedly, Changchun Engley 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 Changchun Engley will offset losses from the drop in Changchun Engley's long position.The idea behind Shannon Semiconductor Technology and Changchun Engley Automobile 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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