Correlation Between GigaDevice SemiconductorBei and Tangshan Jidong
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Tangshan Jidong Cement, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Tangshan Jidong 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 GigaDevice SemiconductorBei with a short position of Tangshan Jidong. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Tangshan Jidong.
Diversification Opportunities for GigaDevice SemiconductorBei and Tangshan Jidong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GigaDevice and Tangshan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Tangshan Jidong Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangshan Jidong Cement and GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBeiji are associated (or correlated) with Tangshan Jidong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangshan Jidong Cement has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Tangshan Jidong go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Tangshan Jidong
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to under-perform the Tangshan Jidong. In addition to that, GigaDevice SemiconductorBei is 1.13 times more volatile than Tangshan Jidong Cement. It trades about -0.01 of its total potential returns per unit of risk. Tangshan Jidong Cement is currently generating about 0.14 per unit of volatility. If you would invest 540.00 in Tangshan Jidong Cement on September 13, 2024 and sell it today you would earn a total of 71.00 from holding Tangshan Jidong Cement or generate 13.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Tangshan Jidong Cement
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Tangshan Jidong Cement |
GigaDevice SemiconductorBei and Tangshan Jidong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Tangshan Jidong
The main advantage of trading using opposite GigaDevice SemiconductorBei and Tangshan Jidong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Tangshan Jidong 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 Tangshan Jidong will offset losses from the drop in Tangshan Jidong's long position.The idea behind GigaDevice SemiconductorBeiji and Tangshan Jidong Cement 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 CEOs Directory module to screen CEOs from public companies around the world.
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