Correlation Between GigaDevice SemiconductorBei and Sichuan Hebang
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By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Sichuan Hebang.
Diversification Opportunities for GigaDevice SemiconductorBei and Sichuan Hebang
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GigaDevice and Sichuan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Sichuan Hebang go up and down completely randomly.
Pair Corralation between GigaDevice SemiconductorBei and Sichuan Hebang
Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to under-perform the Sichuan Hebang. In addition to that, GigaDevice SemiconductorBei is 1.53 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.07 of its total potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.04 per unit of volatility. If you would invest 208.00 in Sichuan Hebang Biotechnology on September 1, 2024 and sell it today you would lose (4.00) from holding Sichuan Hebang Biotechnology or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaDevice SemiconductorBeiji vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| GigaDevice SemiconductorBei |
| Sichuan Hebang Biote |
GigaDevice SemiconductorBei and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaDevice SemiconductorBei and Sichuan Hebang
The main advantage of trading using opposite GigaDevice SemiconductorBei and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaDevice SemiconductorBei position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.The idea behind GigaDevice SemiconductorBeiji and Sichuan Hebang Biotechnology 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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