Correlation Between GigaDevice SemiconductorBei and YiDong Electronics
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and YiDong Electronics Technology, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and YiDong Electronics 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 YiDong Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and YiDong Electronics.
Diversification Opportunities for GigaDevice SemiconductorBei and YiDong Electronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaDevice and YiDong is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and YiDong Electronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YiDong 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 YiDong Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YiDong Electronics has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and YiDong Electronics go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and YiDong Electronics
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to generate 0.68 times more return on investment than YiDong Electronics. However, GigaDevice SemiconductorBeiji is 1.48 times less risky than YiDong Electronics. It trades about 0.28 of its potential returns per unit of risk. YiDong Electronics Technology is currently generating about 0.08 per unit of risk. If you would invest 10,299 in GigaDevice SemiconductorBeiji on November 3, 2024 and sell it today you would earn a total of 2,441 from holding GigaDevice SemiconductorBeiji or generate 23.7% 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. YiDong Electronics Technology
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| YiDong Electronics |
GigaDevice SemiconductorBei and YiDong Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and YiDong Electronics
The main advantage of trading using opposite GigaDevice SemiconductorBei and YiDong Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, YiDong Electronics 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 YiDong Electronics will offset losses from the drop in YiDong Electronics' long position.The idea behind GigaDevice SemiconductorBeiji and YiDong Electronics Technology 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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