Correlation Between Dalian Thermal and Nexchip Semiconductor
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By analyzing existing cross correlation between Dalian Thermal Power and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Dalian Thermal and Nexchip 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 Dalian Thermal with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Nexchip Semiconductor.
Diversification Opportunities for Dalian Thermal and Nexchip Semiconductor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dalian and Nexchip is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Nexchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexchip Semiconductor has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Dalian Thermal and Nexchip Semiconductor
Assuming the 90 days trading horizon Dalian Thermal Power is expected to under-perform the Nexchip Semiconductor. In addition to that, Dalian Thermal is 1.35 times more volatile than Nexchip Semiconductor Corp. It trades about -0.14 of its total potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about -0.14 per unit of volatility. If you would invest 2,467 in Nexchip Semiconductor Corp on October 22, 2024 and sell it today you would lose (151.00) from holding Nexchip Semiconductor Corp or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dalian Thermal Power vs. Nexchip Semiconductor Corp
Performance |
| Timeline |
| Dalian Thermal Power |
| Nexchip Semiconductor |
Dalian Thermal and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Nexchip Semiconductor
The main advantage of trading using opposite Dalian Thermal and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Nexchip 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 Nexchip Semiconductor will offset losses from the drop in Nexchip Semiconductor's long position.| Dalian Thermal vs. Sino Platinum Metals Co | Dalian Thermal vs. Zhejiang Yongjin Metal | Dalian Thermal vs. Western Metal Materials | Dalian Thermal vs. Rising Nonferrous Metals |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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