Correlation Between Nexchip Semiconductor and Dalian Thermal
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By analyzing existing cross correlation between Nexchip Semiconductor Corp and Dalian Thermal Power, you can compare the effects of market volatilities on Nexchip Semiconductor and Dalian Thermal 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 Nexchip Semiconductor with a short position of Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexchip Semiconductor and Dalian Thermal.
Diversification Opportunities for Nexchip Semiconductor and Dalian Thermal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexchip and Dalian is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nexchip Semiconductor Corp and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power and Nexchip Semiconductor 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 Nexchip Semiconductor Corp are associated (or correlated) with Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Nexchip Semiconductor i.e., Nexchip Semiconductor and Dalian Thermal go up and down completely randomly.
Pair Corralation between Nexchip Semiconductor and Dalian Thermal
Assuming the 90 days trading horizon Nexchip Semiconductor Corp is expected to generate 0.74 times more return on investment than Dalian Thermal. However, Nexchip Semiconductor Corp is 1.35 times less risky than Dalian Thermal. It trades about -0.14 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.14 per unit of risk. If you would invest 2,467 in Nexchip Semiconductor Corp on October 22, 2024 and sell it today you would lose (151.00) from holding Nexchip Semiconductor Corp or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nexchip Semiconductor Corp vs. Dalian Thermal Power
Performance |
| Timeline |
| Nexchip Semiconductor |
| Dalian Thermal Power |
Nexchip Semiconductor and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexchip Semiconductor and Dalian Thermal
The main advantage of trading using opposite Nexchip Semiconductor and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexchip Semiconductor position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Nexchip Semiconductor vs. Xiangyang Automobile Bearing | Nexchip Semiconductor vs. Changchun Engley Automobile | Nexchip Semiconductor vs. Shengda Mining Co | Nexchip Semiconductor vs. North Copper Shanxi |
| Dalian Thermal vs. Sino Platinum Metals Co | Dalian Thermal vs. Zhejiang Yongjin Metal | Dalian Thermal vs. Western Metal Materials | Dalian Thermal vs. Rising Nonferrous Metals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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