Correlation Between StarPower Semiconductor and Anhui Huaheng
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By analyzing existing cross correlation between StarPower Semiconductor and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on StarPower Semiconductor and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of StarPower Semiconductor and Anhui Huaheng.
Diversification Opportunities for StarPower Semiconductor and Anhui Huaheng
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between StarPower and Anhui is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding StarPower Semiconductor and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of StarPower Semiconductor i.e., StarPower Semiconductor and Anhui Huaheng go up and down completely randomly.
Pair Corralation between StarPower Semiconductor and Anhui Huaheng
Assuming the 90 days trading horizon StarPower Semiconductor is expected to generate 1.06 times more return on investment than Anhui Huaheng. However, StarPower Semiconductor is 1.06 times more volatile than Anhui Huaheng Biotechnology. It trades about -0.08 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.18 per unit of risk. If you would invest 9,686 in StarPower Semiconductor on November 6, 2024 and sell it today you would lose (1,286) from holding StarPower Semiconductor or give up 13.28% 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. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| StarPower Semiconductor |
| Anhui Huaheng Biotec |
StarPower Semiconductor and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StarPower Semiconductor and Anhui Huaheng
The main advantage of trading using opposite StarPower Semiconductor and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StarPower Semiconductor position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng's long position.The idea behind StarPower Semiconductor and Anhui Huaheng Biotechnology 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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