Correlation Between China State and Semiconductor Manufacturing
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By analyzing existing cross correlation between China State Construction and Semiconductor Manufacturing Electronics, you can compare the effects of market volatilities on China State 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 China State with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Semiconductor Manufacturing.
Diversification Opportunities for China State and Semiconductor Manufacturing
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Semiconductor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Semiconductor Manufacturing El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and China State 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 China State Construction 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 China State i.e., China State and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between China State and Semiconductor Manufacturing
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Semiconductor Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.68 times less risky than Semiconductor Manufacturing. The stock trades about -0.07 of its potential returns per unit of risk. The Semiconductor Manufacturing Electronics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 479.00 in Semiconductor Manufacturing Electronics on August 29, 2024 and sell it today you would earn a total of 73.00 from holding Semiconductor Manufacturing Electronics or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Semiconductor Manufacturing El
Performance |
| Timeline |
| China State Construction |
| Semiconductor Manufacturing |
China State and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Semiconductor Manufacturing
The main advantage of trading using opposite China State and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. Shenyang Chemical Industry | China State vs. Lianhe Chemical Technology | China State vs. North Huajin Chemical | China State vs. Maoming Petro Chemical Shihua |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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