Correlation Between StarPower Semiconductor and Hunan Investment
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By analyzing existing cross correlation between StarPower Semiconductor and Hunan Investment Group, you can compare the effects of market volatilities on StarPower Semiconductor and Hunan Investment 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 StarPower Semiconductor with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of StarPower Semiconductor and Hunan Investment.
Diversification Opportunities for StarPower Semiconductor and Hunan Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between StarPower and Hunan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding StarPower Semiconductor and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and StarPower Semiconductor 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 StarPower Semiconductor are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of StarPower Semiconductor i.e., StarPower Semiconductor and Hunan Investment go up and down completely randomly.
Pair Corralation between StarPower Semiconductor and Hunan Investment
Assuming the 90 days trading horizon StarPower Semiconductor is expected to under-perform the Hunan Investment. In addition to that, StarPower Semiconductor is 1.31 times more volatile than Hunan Investment Group. It trades about -0.04 of its total potential returns per unit of risk. Hunan Investment Group is currently generating about 0.03 per unit of volatility. If you would invest 561.00 in Hunan Investment Group on September 14, 2024 and sell it today you would earn a total of 54.00 from holding Hunan Investment Group or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StarPower Semiconductor vs. Hunan Investment Group
Performance |
| Timeline |
| StarPower Semiconductor |
| Hunan Investment |
StarPower Semiconductor and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StarPower Semiconductor and Hunan Investment
The main advantage of trading using opposite StarPower Semiconductor and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StarPower Semiconductor position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.The idea behind StarPower Semiconductor and Hunan Investment Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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