Correlation Between General Interface and Zhen Ding
Can any of the company-specific risk be diversified away by investing in both General Interface and Zhen Ding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining General Interface and Zhen Ding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Interface Solution and Zhen Ding Technology, you can compare the effects of market volatilities on General Interface and Zhen Ding 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 General Interface with a short position of Zhen Ding. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Interface and Zhen Ding.
Diversification Opportunities for General Interface and Zhen Ding
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between General and Zhen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding General Interface Solution and Zhen Ding Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhen Ding Technology and General Interface 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 General Interface Solution are associated (or correlated) with Zhen Ding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhen Ding Technology has no effect on the direction of General Interface i.e., General Interface and Zhen Ding go up and down completely randomly.
Pair Corralation between General Interface and Zhen Ding
Assuming the 90 days trading horizon General Interface Solution is expected to generate 1.88 times more return on investment than Zhen Ding. However, General Interface is 1.88 times more volatile than Zhen Ding Technology. It trades about 0.18 of its potential returns per unit of risk. Zhen Ding Technology is currently generating about 0.29 per unit of risk. If you would invest 5,160 in General Interface Solution on November 28, 2024 and sell it today you would earn a total of 320.00 from holding General Interface Solution or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Interface Solution vs. Zhen Ding Technology
Performance |
| Timeline |
| General Interface |
| Zhen Ding Technology |
General Interface and Zhen Ding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Interface and Zhen Ding
The main advantage of trading using opposite General Interface and Zhen Ding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Interface position performs unexpectedly, Zhen Ding 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 Zhen Ding will offset losses from the drop in Zhen Ding's long position.| General Interface vs. Zhen Ding Technology | General Interface vs. TPK Holding Co | General Interface vs. Catcher Technology Co | General Interface vs. Flexium Interconnect |
| Zhen Ding vs. Unimicron Technology Corp | Zhen Ding vs. Flexium Interconnect | Zhen Ding vs. Catcher Technology Co | Zhen Ding vs. Pegatron Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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