Correlation Between State Grid and TongFu Microelectronics
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By analyzing existing cross correlation between State Grid InformationCommunication and TongFu Microelectronics Co, you can compare the effects of market volatilities on State Grid 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 State Grid with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and TongFu Microelectronics.
Diversification Opportunities for State Grid and TongFu Microelectronics
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and TongFu is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and State Grid 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 State Grid InformationCommunication 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 State Grid i.e., State Grid and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between State Grid and TongFu Microelectronics
Assuming the 90 days trading horizon State Grid is expected to generate 1.34 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, State Grid InformationCommunication is 1.37 times less risky than TongFu Microelectronics. It trades about 0.11 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,702 in TongFu Microelectronics Co on September 1, 2024 and sell it today you would earn a total of 297.00 from holding TongFu Microelectronics Co or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. TongFu Microelectronics Co
Performance |
| Timeline |
| State Grid Informati |
| TongFu Microelectronics |
State Grid and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and TongFu Microelectronics
The main advantage of trading using opposite State Grid and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid 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.| State Grid vs. Guangzhou KingTeller Technology | State Grid vs. Aofu Environmental Technology | State Grid vs. Guangdong Liantai Environmental | State Grid vs. Hubei Forbon Technology |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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