Correlation Between Liuzhou Chemical and TongFu Microelectronics
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By analyzing existing cross correlation between Liuzhou Chemical Industry and TongFu Microelectronics Co, you can compare the effects of market volatilities on Liuzhou Chemical 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 Liuzhou Chemical with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and TongFu Microelectronics.
Diversification Opportunities for Liuzhou Chemical and TongFu Microelectronics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Liuzhou and TongFu is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Liuzhou Chemical 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 Liuzhou Chemical Industry 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 Liuzhou Chemical i.e., Liuzhou Chemical and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and TongFu Microelectronics
Assuming the 90 days trading horizon Liuzhou Chemical is expected to generate 3.34 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Liuzhou Chemical Industry is 1.1 times less risky than TongFu Microelectronics. It trades about 0.01 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,289 in TongFu Microelectronics Co on October 29, 2024 and sell it today you would earn a total of 598.00 from holding TongFu Microelectronics Co or generate 26.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| TongFu Microelectronics |
Liuzhou Chemical and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and TongFu Microelectronics
The main advantage of trading using opposite Liuzhou Chemical and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical 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.| Liuzhou Chemical vs. Zotye Automobile Co | Liuzhou Chemical vs. Bosera CMSK Industrial | Liuzhou Chemical vs. Iat Automobile Technology | Liuzhou Chemical vs. Shanghai Jinfeng Wine |
| TongFu Microelectronics vs. Ligao Foods CoLtd | TongFu Microelectronics vs. Sichuan Hebang Biotechnology | TongFu Microelectronics vs. Fujian Anjoy Foods | TongFu Microelectronics vs. Guilin Seamild Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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