Correlation Between GigaDevice SemiconductorBei and Ningbo Jianan
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Ningbo Jianan Electronics, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Ningbo Jianan 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 Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Ningbo Jianan.
Diversification Opportunities for GigaDevice SemiconductorBei and Ningbo Jianan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GigaDevice and Ningbo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics 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 Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Ningbo Jianan go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Ningbo Jianan
Assuming the 90 days trading horizon GigaDevice SemiconductorBei is expected to generate 23.51 times less return on investment than Ningbo Jianan. But when comparing it to its historical volatility, GigaDevice SemiconductorBeiji is 1.4 times less risky than Ningbo Jianan. It trades about 0.0 of its potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,530 in Ningbo Jianan Electronics on August 24, 2024 and sell it today you would earn a total of 720.00 from holding Ningbo Jianan Electronics or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Ningbo Jianan Electronics |
GigaDevice SemiconductorBei and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Ningbo Jianan
The main advantage of trading using opposite GigaDevice SemiconductorBei and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Ningbo Jianan 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 Ningbo Jianan will offset losses from the drop in Ningbo Jianan's long position.The idea behind GigaDevice SemiconductorBeiji and Ningbo Jianan Electronics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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