Correlation Between Panda Financial and Semiconductor Manufacturing
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By analyzing existing cross correlation between Panda Financial Holding and Semiconductor Manufacturing Intl, you can compare the effects of market volatilities on Panda Financial and Semiconductor Manufacturing 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 Panda Financial with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Financial and Semiconductor Manufacturing.
Diversification Opportunities for Panda Financial and Semiconductor Manufacturing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panda and Semiconductor is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Panda Financial Holding and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and Panda Financial 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 Panda Financial Holding are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Panda Financial i.e., Panda Financial and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between Panda Financial and Semiconductor Manufacturing
Assuming the 90 days trading horizon Panda Financial is expected to generate 1.6 times less return on investment than Semiconductor Manufacturing. But when comparing it to its historical volatility, Panda Financial Holding is 1.06 times less risky than Semiconductor Manufacturing. It trades about 0.05 of its potential returns per unit of risk. Semiconductor Manufacturing Intl is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,083 in Semiconductor Manufacturing Intl on September 4, 2024 and sell it today you would earn a total of 3,866 from holding Semiconductor Manufacturing Intl or generate 76.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Financial Holding vs. Semiconductor Manufacturing In
Performance |
| Timeline |
| Panda Financial Holding |
| Semiconductor Manufacturing |
Panda Financial and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Financial and Semiconductor Manufacturing
The main advantage of trading using opposite Panda Financial and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Financial position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| Panda Financial vs. Industrial and Commercial | Panda Financial vs. China Construction Bank | Panda Financial vs. Agricultural Bank of | Panda Financial vs. Bank of China |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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