Correlation Between GigaDevice SemiconductorBei and Nanjing Putian
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Nanjing Putian 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 Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Nanjing Putian.
Diversification Opportunities for GigaDevice SemiconductorBei and Nanjing Putian
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GigaDevice and Nanjing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec 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 Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Nanjing Putian go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Nanjing Putian
Assuming the 90 days trading horizon GigaDevice SemiconductorBei is expected to generate 3.58 times less return on investment than Nanjing Putian. But when comparing it to its historical volatility, GigaDevice SemiconductorBeiji is 1.23 times less risky than Nanjing Putian. It trades about 0.13 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Nanjing Putian Telecommunications on September 2, 2024 and sell it today you would earn a total of 266.00 from holding Nanjing Putian Telecommunications or generate 137.11% 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. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Nanjing Putian Telec |
GigaDevice SemiconductorBei and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Nanjing Putian
The main advantage of trading using opposite GigaDevice SemiconductorBei and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.The idea behind GigaDevice SemiconductorBeiji and Nanjing Putian Telecommunications 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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