Correlation Between GigaDevice SemiconductorBei and Tongyu Communication
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Tongyu Communication, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Tongyu Communication 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 Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Tongyu Communication.
Diversification Opportunities for GigaDevice SemiconductorBei and Tongyu Communication
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaDevice and Tongyu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Tongyu Communication go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Tongyu Communication
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to under-perform the Tongyu Communication. But the stock apears to be less risky and, when comparing its historical volatility, GigaDevice SemiconductorBeiji is 2.01 times less risky than Tongyu Communication. The stock trades about -0.06 of its potential returns per unit of risk. The Tongyu Communication is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Tongyu Communication on August 31, 2024 and sell it today you would earn a total of 328.00 from holding Tongyu Communication or generate 23.85% 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. Tongyu Communication
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Tongyu Communication |
GigaDevice SemiconductorBei and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Tongyu Communication
The main advantage of trading using opposite GigaDevice SemiconductorBei and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.The idea behind GigaDevice SemiconductorBeiji and Tongyu Communication 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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