Correlation Between Fuzhou Rockchip and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Fuzhou Rockchip Electronics and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Fuzhou Rockchip and Shijiazhuang Tonhe 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 Fuzhou Rockchip with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuzhou Rockchip and Shijiazhuang Tonhe.
Diversification Opportunities for Fuzhou Rockchip and Shijiazhuang Tonhe
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fuzhou and Shijiazhuang is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fuzhou Rockchip Electronics and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Fuzhou Rockchip 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 Fuzhou Rockchip Electronics are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Fuzhou Rockchip i.e., Fuzhou Rockchip and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Fuzhou Rockchip and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Fuzhou Rockchip Electronics is expected to generate 0.8 times more return on investment than Shijiazhuang Tonhe. However, Fuzhou Rockchip Electronics is 1.25 times less risky than Shijiazhuang Tonhe. It trades about 0.04 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.02 per unit of risk. If you would invest 7,758 in Fuzhou Rockchip Electronics on October 15, 2024 and sell it today you would earn a total of 4,342 from holding Fuzhou Rockchip Electronics or generate 55.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuzhou Rockchip Electronics vs. Shijiazhuang Tonhe Electronics
Performance |
| Timeline |
| Fuzhou Rockchip Elec |
| Shijiazhuang Tonhe |
Fuzhou Rockchip and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuzhou Rockchip and Shijiazhuang Tonhe
The main advantage of trading using opposite Fuzhou Rockchip and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuzhou Rockchip position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.| Fuzhou Rockchip vs. Hainan Airlines Co | Fuzhou Rockchip vs. Sinofibers Technology Co | Fuzhou Rockchip vs. Kuangda Technology Group | Fuzhou Rockchip vs. Ingenic Semiconductor |
| Shijiazhuang Tonhe vs. Beijing Jiaman Dress | Shijiazhuang Tonhe vs. Anhui Transport Consulting | Shijiazhuang Tonhe vs. Changjiang Jinggong Steel | Shijiazhuang Tonhe vs. Road Environment 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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