Correlation Between Thinkingdom Media and Cambricon Technologies
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By analyzing existing cross correlation between Thinkingdom Media Group and Cambricon Technologies Corp, you can compare the effects of market volatilities on Thinkingdom Media and Cambricon Technologies 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 Thinkingdom Media with a short position of Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thinkingdom Media and Cambricon Technologies.
Diversification Opportunities for Thinkingdom Media and Cambricon Technologies
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thinkingdom and Cambricon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Thinkingdom Media Group and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies and Thinkingdom Media 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 Thinkingdom Media Group are associated (or correlated) with Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Thinkingdom Media i.e., Thinkingdom Media and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Thinkingdom Media and Cambricon Technologies
Assuming the 90 days trading horizon Thinkingdom Media is expected to generate 4.69 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Thinkingdom Media Group is 1.96 times less risky than Cambricon Technologies. It trades about 0.07 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 15,897 in Cambricon Technologies Corp on September 3, 2024 and sell it today you would earn a total of 40,203 from holding Cambricon Technologies Corp or generate 252.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thinkingdom Media Group vs. Cambricon Technologies Corp
Performance |
| Timeline |
| Thinkingdom Media |
| Cambricon Technologies |
Thinkingdom Media and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thinkingdom Media and Cambricon Technologies
The main advantage of trading using opposite Thinkingdom Media and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thinkingdom Media position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Thinkingdom Media vs. Gansu Jiu Steel | Thinkingdom Media vs. Ming Yang Smart | Thinkingdom Media vs. Aba Chemicals Corp | Thinkingdom Media vs. Loctek Ergonomic Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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