Correlation Between GigaDevice SemiconductorBei and Shanghai Phichem
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Shanghai Phichem Material, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Shanghai Phichem.
Diversification Opportunities for GigaDevice SemiconductorBei and Shanghai Phichem
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between GigaDevice and Shanghai is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Shanghai Phichem go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Shanghai Phichem
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to generate 2.35 times more return on investment than Shanghai Phichem. However, GigaDevice SemiconductorBei is 2.35 times more volatile than Shanghai Phichem Material. It trades about 0.37 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about -0.37 per unit of risk. If you would invest 8,421 in GigaDevice SemiconductorBeiji on October 12, 2024 and sell it today you would earn a total of 3,869 from holding GigaDevice SemiconductorBeiji or generate 45.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Shanghai Phichem Material
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Shanghai Phichem Material |
GigaDevice SemiconductorBei and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Shanghai Phichem
The main advantage of trading using opposite GigaDevice SemiconductorBei and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.The idea behind GigaDevice SemiconductorBeiji and Shanghai Phichem Material 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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