Correlation Between GigaDevice SemiconductorBei and Guangzhou Seagull
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Guangzhou Seagull Kitchen, you can compare the effects of market volatilities on GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBei with a short position of Guangzhou Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Guangzhou Seagull.
Diversification Opportunities for GigaDevice SemiconductorBei and Guangzhou Seagull
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaDevice and Guangzhou is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji 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 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 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 GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Guangzhou Seagull go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Guangzhou Seagull
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to under-perform the Guangzhou Seagull. In addition to that, GigaDevice SemiconductorBei is 1.05 times more volatile than Guangzhou Seagull Kitchen. It trades about -0.01 of its total potential returns per unit of risk. Guangzhou Seagull Kitchen is currently generating about 0.11 per unit of volatility. If you would invest 254.00 in Guangzhou Seagull Kitchen on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Guangzhou Seagull Kitchen or generate 36.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Guangzhou Seagull Kitchen
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Guangzhou Seagull Kitchen |
GigaDevice SemiconductorBei and Guangzhou Seagull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Guangzhou Seagull
The main advantage of trading using opposite GigaDevice SemiconductorBei and Guangzhou Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBeiji 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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