Correlation Between Yingde Greatchem and Nexchip Semiconductor
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Yingde Greatchem and Nexchip Semiconductor 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 Yingde Greatchem with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Nexchip Semiconductor.
Diversification Opportunities for Yingde Greatchem and Nexchip Semiconductor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yingde and Nexchip is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Nexchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexchip Semiconductor has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Nexchip Semiconductor
Assuming the 90 days trading horizon Yingde Greatchem is expected to generate 1.56 times less return on investment than Nexchip Semiconductor. But when comparing it to its historical volatility, Yingde Greatchem Chemicals is 1.53 times less risky than Nexchip Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,613 in Nexchip Semiconductor Corp on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Nexchip Semiconductor Corp or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Nexchip Semiconductor Corp
Performance |
| Timeline |
| Yingde Greatchem Che |
| Nexchip Semiconductor |
Yingde Greatchem and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Nexchip Semiconductor
The main advantage of trading using opposite Yingde Greatchem and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Nexchip Semiconductor 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 Nexchip Semiconductor will offset losses from the drop in Nexchip Semiconductor's long position.| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
| Nexchip Semiconductor vs. Hua Xia Bank | Nexchip Semiconductor vs. Guosheng Financial Holding | Nexchip Semiconductor vs. Xinjiang Tianrun Dairy | Nexchip Semiconductor vs. Guilin Seamild Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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