Correlation Between Guangdong Wens and TongFu Microelectronics
Specify exactly 2 symbols:
By analyzing existing cross correlation between Guangdong Wens Foodstuff and TongFu Microelectronics Co, you can compare the effects of market volatilities on Guangdong Wens 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 Guangdong Wens with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and TongFu Microelectronics.
Diversification Opportunities for Guangdong Wens and TongFu Microelectronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and TongFu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Guangdong Wens 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 Guangdong Wens Foodstuff 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 Guangdong Wens i.e., Guangdong Wens and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Guangdong Wens and TongFu Microelectronics
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the TongFu Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 2.01 times less risky than TongFu Microelectronics. The stock trades about -0.06 of its potential returns per unit of risk. The TongFu Microelectronics Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. 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 | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TongFu Microelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangdong Wens and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and TongFu Microelectronics
The main advantage of trading using opposite Guangdong Wens and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens 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 Guangdong Wens Foodstuff 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |