Correlation Between Wuhan Yangtze and StarPower Semiconductor
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By analyzing existing cross correlation between Wuhan Yangtze Communication and StarPower Semiconductor, you can compare the effects of market volatilities on Wuhan Yangtze and StarPower 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 Wuhan Yangtze with a short position of StarPower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and StarPower Semiconductor.
Diversification Opportunities for Wuhan Yangtze and StarPower Semiconductor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and StarPower is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and StarPower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StarPower Semiconductor 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 StarPower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StarPower Semiconductor has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and StarPower Semiconductor go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and StarPower Semiconductor
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.04 times more return on investment than StarPower Semiconductor. However, Wuhan Yangtze is 1.04 times more volatile than StarPower Semiconductor. It trades about 0.05 of its potential returns per unit of risk. StarPower Semiconductor is currently generating about -0.05 per unit of risk. If you would invest 1,991 in Wuhan Yangtze Communication on September 14, 2024 and sell it today you would earn a total of 1,020 from holding Wuhan Yangtze Communication or generate 51.23% 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. StarPower Semiconductor
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| StarPower Semiconductor |
Wuhan Yangtze and StarPower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and StarPower Semiconductor
The main advantage of trading using opposite Wuhan Yangtze and StarPower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, StarPower 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 StarPower Semiconductor will offset losses from the drop in StarPower Semiconductor's long position.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Bank of China | Wuhan Yangtze vs. Agricultural Bank of |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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