Correlation Between China World and Nexchip Semiconductor
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By analyzing existing cross correlation between China World Trade and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on China World 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 China World with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Nexchip Semiconductor.
Diversification Opportunities for China World and Nexchip Semiconductor
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Nexchip is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor and China World 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 China World Trade 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 China World i.e., China World and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between China World and Nexchip Semiconductor
Assuming the 90 days trading horizon China World Trade is expected to generate 0.61 times more return on investment than Nexchip Semiconductor. However, China World Trade is 1.65 times less risky than Nexchip Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.02 per unit of risk. If you would invest 1,627 in China World Trade on October 14, 2024 and sell it today you would earn a total of 697.00 from holding China World Trade or generate 42.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.82% |
| Values | Daily Returns |
China World Trade vs. Nexchip Semiconductor Corp
Performance |
| Timeline |
| China World Trade |
| Nexchip Semiconductor |
China World and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Nexchip Semiconductor
The main advantage of trading using opposite China World and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World 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.| China World vs. Fujian Longzhou Transportation | China World vs. Ningbo Jintian Copper | China World vs. Dalian Thermal Power | China World vs. Hainan Haiqi Transportation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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