Correlation Between Guotai Epoint and TongFu Microelectronics
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By analyzing existing cross correlation between Guotai Epoint Software and TongFu Microelectronics Co, you can compare the effects of market volatilities on Guotai Epoint and TongFu Microelectronics 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 Guotai Epoint with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guotai Epoint and TongFu Microelectronics.
Diversification Opportunities for Guotai Epoint and TongFu Microelectronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guotai and TongFu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guotai Epoint Software and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Guotai Epoint 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 Guotai Epoint Software are associated (or correlated) with TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of Guotai Epoint i.e., Guotai Epoint and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Guotai Epoint and TongFu Microelectronics
Assuming the 90 days trading horizon Guotai Epoint Software is expected to under-perform the TongFu Microelectronics. In addition to that, Guotai Epoint is 1.07 times more volatile than TongFu Microelectronics Co. It trades about -0.02 of its total potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.04 per unit of volatility. If you would invest 1,912 in TongFu Microelectronics Co on October 27, 2024 and sell it today you would earn a total of 975.00 from holding TongFu Microelectronics Co or generate 50.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guotai Epoint Software vs. TongFu Microelectronics Co
Performance |
Timeline |
Guotai Epoint Software |
TongFu Microelectronics |
Guotai Epoint and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guotai Epoint and TongFu Microelectronics
The main advantage of trading using opposite Guotai Epoint and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guotai Epoint position performs unexpectedly, TongFu Microelectronics 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 TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.Guotai Epoint vs. Zhejiang Construction Investment | Guotai Epoint vs. Ping An Insurance | Guotai Epoint vs. Xiandai Investment Co | Guotai Epoint vs. China Life Insurance |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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