Correlation Between Huaneng Lancang and TongFu Microelectronics
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By analyzing existing cross correlation between Huaneng Lancang River and TongFu Microelectronics Co, you can compare the effects of market volatilities on Huaneng Lancang 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 Huaneng Lancang with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and TongFu Microelectronics.
Diversification Opportunities for Huaneng Lancang and TongFu Microelectronics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Huaneng and TongFu is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Huaneng Lancang 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 Huaneng Lancang River 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 Huaneng Lancang i.e., Huaneng Lancang and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Huaneng Lancang and TongFu Microelectronics
Assuming the 90 days trading horizon Huaneng Lancang River is expected to generate 0.51 times more return on investment than TongFu Microelectronics. However, Huaneng Lancang River is 1.97 times less risky than TongFu Microelectronics. It trades about 0.02 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about -0.06 per unit of risk. If you would invest 967.00 in Huaneng Lancang River on September 18, 2024 and sell it today you would earn a total of 5.00 from holding Huaneng Lancang River or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Huaneng Lancang River vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Huaneng Lancang River |
| TongFu Microelectronics |
Huaneng Lancang and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and TongFu Microelectronics
The main advantage of trading using opposite Huaneng Lancang and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang 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.| Huaneng Lancang vs. Cultural Investment Holdings | Huaneng Lancang vs. Haima Automobile Group | Huaneng Lancang vs. Shenzhen Centralcon Investment | Huaneng Lancang vs. Sunwave Communications Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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