Correlation Between StarPower Semiconductor and Guangzhou Seagull
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By analyzing existing cross correlation between StarPower Semiconductor and Guangzhou Seagull Kitchen, you can compare the effects of market volatilities on StarPower Semiconductor and Guangzhou Seagull 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 Guangzhou Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of StarPower Semiconductor and Guangzhou Seagull.
Diversification Opportunities for StarPower Semiconductor and Guangzhou Seagull
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between StarPower and Guangzhou is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding StarPower Semiconductor and Guangzhou Seagull Kitchen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Seagull Kitchen 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 Guangzhou Seagull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Seagull Kitchen has no effect on the direction of StarPower Semiconductor i.e., StarPower Semiconductor and Guangzhou Seagull go up and down completely randomly.
Pair Corralation between StarPower Semiconductor and Guangzhou Seagull
Assuming the 90 days trading horizon StarPower Semiconductor is expected to under-perform the Guangzhou Seagull. But the stock apears to be less risky and, when comparing its historical volatility, StarPower Semiconductor is 1.62 times less risky than Guangzhou Seagull. The stock trades about -0.25 of its potential returns per unit of risk. The Guangzhou Seagull Kitchen is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 293.00 in Guangzhou Seagull Kitchen on October 30, 2024 and sell it today you would lose (8.00) from holding Guangzhou Seagull Kitchen or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StarPower Semiconductor vs. Guangzhou Seagull Kitchen
Performance |
| Timeline |
| StarPower Semiconductor |
| Guangzhou Seagull Kitchen |
StarPower Semiconductor and Guangzhou Seagull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StarPower Semiconductor and Guangzhou Seagull
The main advantage of trading using opposite StarPower Semiconductor and Guangzhou Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StarPower Semiconductor position performs unexpectedly, Guangzhou Seagull 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 Guangzhou Seagull will offset losses from the drop in Guangzhou Seagull's long position.The idea behind StarPower Semiconductor and Guangzhou Seagull Kitchen 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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