Correlation Between Guangxi Wuzhou and GigaDevice SemiconductorBei
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and GigaDevice SemiconductorBeiji, you can compare the effects of market volatilities on Guangxi Wuzhou and GigaDevice SemiconductorBei 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 Guangxi Wuzhou with a short position of GigaDevice SemiconductorBei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and GigaDevice SemiconductorBei.
Diversification Opportunities for Guangxi Wuzhou and GigaDevice SemiconductorBei
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangxi and GigaDevice is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and GigaDevice SemiconductorBeiji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaDevice SemiconductorBei and Guangxi Wuzhou 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 Guangxi Wuzhou Communications are associated (or correlated) with GigaDevice SemiconductorBei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaDevice SemiconductorBei has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and GigaDevice SemiconductorBei go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and GigaDevice SemiconductorBei
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to under-perform the GigaDevice SemiconductorBei. But the stock apears to be less risky and, when comparing its historical volatility, Guangxi Wuzhou Communications is 1.6 times less risky than GigaDevice SemiconductorBei. The stock trades about -0.25 of its potential returns per unit of risk. The GigaDevice SemiconductorBeiji is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 10,299 in GigaDevice SemiconductorBeiji on November 3, 2024 and sell it today you would earn a total of 2,441 from holding GigaDevice SemiconductorBeiji or generate 23.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. GigaDevice SemiconductorBeiji
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| GigaDevice SemiconductorBei |
Guangxi Wuzhou and GigaDevice SemiconductorBei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and GigaDevice SemiconductorBei
The main advantage of trading using opposite Guangxi Wuzhou and GigaDevice SemiconductorBei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBei will offset losses from the drop in GigaDevice SemiconductorBei's long position.| Guangxi Wuzhou vs. Qilu Bank Co | Guangxi Wuzhou vs. Huizhou Speed Wireless | Guangxi Wuzhou vs. Ping An Insurance | Guangxi Wuzhou vs. HeNan Splendor Science |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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