Correlation Between Wuhan Yangtze and TongFu Microelectronics
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By analyzing existing cross correlation between Wuhan Yangtze Communication and TongFu Microelectronics Co, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and TongFu Microelectronics.
Diversification Opportunities for Wuhan Yangtze and TongFu Microelectronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and TongFu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and TongFu Microelectronics
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.21 times more return on investment than TongFu Microelectronics. However, Wuhan Yangtze is 1.21 times more volatile than TongFu Microelectronics Co. It trades about 0.12 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.07 per unit of risk. If you would invest 1,780 in Wuhan Yangtze Communication on September 1, 2024 and sell it today you would earn a total of 1,189 from holding Wuhan Yangtze Communication or generate 66.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| TongFu Microelectronics |
Wuhan Yangtze and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and TongFu Microelectronics
The main advantage of trading using opposite Wuhan Yangtze and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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