Correlation Between Guangdong Transtek and Sihui Fuji
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By analyzing existing cross correlation between Guangdong Transtek Medical and Sihui Fuji Electronics, you can compare the effects of market volatilities on Guangdong Transtek and Sihui Fuji 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 Transtek with a short position of Sihui Fuji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Transtek and Sihui Fuji.
Diversification Opportunities for Guangdong Transtek and Sihui Fuji
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangdong and Sihui is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Transtek Medical and Sihui Fuji Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sihui Fuji Electronics and Guangdong Transtek 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 Transtek Medical are associated (or correlated) with Sihui Fuji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sihui Fuji Electronics has no effect on the direction of Guangdong Transtek i.e., Guangdong Transtek and Sihui Fuji go up and down completely randomly.
Pair Corralation between Guangdong Transtek and Sihui Fuji
Assuming the 90 days trading horizon Guangdong Transtek is expected to generate 8.77 times less return on investment than Sihui Fuji. But when comparing it to its historical volatility, Guangdong Transtek Medical is 1.38 times less risky than Sihui Fuji. It trades about 0.08 of its potential returns per unit of risk. Sihui Fuji Electronics is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 2,585 in Sihui Fuji Electronics on November 8, 2024 and sell it today you would earn a total of 991.00 from holding Sihui Fuji Electronics or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Transtek Medical vs. Sihui Fuji Electronics
Performance |
| Timeline |
| Guangdong Transtek |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Sihui Fuji Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Guangdong Transtek and Sihui Fuji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Transtek and Sihui Fuji
The main advantage of trading using opposite Guangdong Transtek and Sihui Fuji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Transtek position performs unexpectedly, Sihui Fuji 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 Sihui Fuji will offset losses from the drop in Sihui Fuji's long position.The idea behind Guangdong Transtek Medical and Sihui Fuji Electronics 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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