Correlation Between GigaDevice SemiconductorBei and Xinke Material
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Xinke Material, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Xinke Material 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 Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Xinke Material.
Diversification Opportunities for GigaDevice SemiconductorBei and Xinke Material
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GigaDevice and Xinke is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke 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 Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Xinke Material go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Xinke Material
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to under-perform the Xinke Material. But the stock apears to be less risky and, when comparing its historical volatility, GigaDevice SemiconductorBeiji is 1.05 times less risky than Xinke Material. The stock trades about -0.05 of its potential returns per unit of risk. The Xinke Material is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Xinke Material on December 8, 2024 and sell it today you would lose (7.00) from holding Xinke Material or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Xinke Material
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Xinke Material |
GigaDevice SemiconductorBei and Xinke Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Xinke Material
The main advantage of trading using opposite GigaDevice SemiconductorBei and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material's long position.The idea behind GigaDevice SemiconductorBeiji and Xinke 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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