Correlation Between GigaDevice SemiconductorBei and Zhejiang Kingland
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Zhejiang Kingland 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 Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Zhejiang Kingland.
Diversification Opportunities for GigaDevice SemiconductorBei and Zhejiang Kingland
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GigaDevice and Zhejiang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland 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 Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Zhejiang Kingland
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to generate 1.28 times more return on investment than Zhejiang Kingland. However, GigaDevice SemiconductorBei is 1.28 times more volatile than Zhejiang Kingland Pipeline. It trades about 0.13 of its potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.16 per unit of risk. If you would invest 6,680 in GigaDevice SemiconductorBeiji on September 12, 2024 and sell it today you would earn a total of 1,741 from holding GigaDevice SemiconductorBeiji or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Zhejiang Kingland |
GigaDevice SemiconductorBei and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Zhejiang Kingland
The main advantage of trading using opposite GigaDevice SemiconductorBei and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.The idea behind GigaDevice SemiconductorBeiji and Zhejiang Kingland Pipeline 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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