Correlation Between Huafa Industrial and Union Semiconductor
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By analyzing existing cross correlation between Huafa Industrial Co and Union Semiconductor Co, you can compare the effects of market volatilities on Huafa Industrial and Union 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 Huafa Industrial with a short position of Union Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Union Semiconductor.
Diversification Opportunities for Huafa Industrial and Union Semiconductor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Union is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Union Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Semiconductor and Huafa Industrial 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 Huafa Industrial Co are associated (or correlated) with Union Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Semiconductor has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Union Semiconductor go up and down completely randomly.
Pair Corralation between Huafa Industrial and Union Semiconductor
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Union Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.53 times less risky than Union Semiconductor. The stock trades about -0.08 of its potential returns per unit of risk. The Union Semiconductor Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 929.00 in Union Semiconductor Co on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Union Semiconductor Co or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Union Semiconductor Co
Performance |
| Timeline |
| Huafa Industrial |
| Union Semiconductor |
Huafa Industrial and Union Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Union Semiconductor
The main advantage of trading using opposite Huafa Industrial and Union Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Union 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 Union Semiconductor will offset losses from the drop in Union Semiconductor's long position.| Huafa Industrial vs. BeiGene | Huafa Industrial vs. Kweichow Moutai Co | Huafa Industrial vs. Beijing Roborock Technology | Huafa Industrial vs. G bits Network Technology |
| Union Semiconductor vs. Industrial and Commercial | Union Semiconductor vs. Kweichow Moutai Co | Union Semiconductor vs. Agricultural Bank of | Union Semiconductor vs. China Mobile Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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