Correlation Between Hubei Xingfa and Nexchip Semiconductor
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Hubei Xingfa 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 Hubei Xingfa with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Nexchip Semiconductor.
Diversification Opportunities for Hubei Xingfa and Nexchip Semiconductor
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hubei and Nexchip is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa 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 Hubei Xingfa 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 Hubei Xingfa 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 Hubei Xingfa i.e., Hubei Xingfa and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Nexchip Semiconductor
Assuming the 90 days trading horizon Hubei Xingfa is expected to generate 1.45 times less return on investment than Nexchip Semiconductor. But when comparing it to its historical volatility, Hubei Xingfa Chemicals is 1.06 times less risky than Nexchip Semiconductor. It trades about 0.09 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,242 in Nexchip Semiconductor Corp on November 3, 2024 and sell it today you would earn a total of 88.00 from holding Nexchip Semiconductor Corp or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Nexchip Semiconductor Corp
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Nexchip Semiconductor |
Hubei Xingfa and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Nexchip Semiconductor
The main advantage of trading using opposite Hubei Xingfa and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa 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.| Hubei Xingfa vs. Zhangjiagang Freetrade Science | Hubei Xingfa vs. Caihong Display Devices | Hubei Xingfa vs. Shenzhen Noposion Agrochemicals | Hubei Xingfa vs. Ningbo Bohui Chemical |
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