Correlation Between Guangdong Cellwise and Dongguan Tarry
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By analyzing existing cross correlation between Guangdong Cellwise Microelectronics and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Guangdong Cellwise and Dongguan Tarry 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 Guangdong Cellwise with a short position of Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Cellwise and Dongguan Tarry.
Diversification Opportunities for Guangdong Cellwise and Dongguan Tarry
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Dongguan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Cellwise Microelectr and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect and Guangdong Cellwise 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 Guangdong Cellwise Microelectronics are associated (or correlated) with Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Guangdong Cellwise i.e., Guangdong Cellwise and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Guangdong Cellwise and Dongguan Tarry
Assuming the 90 days trading horizon Guangdong Cellwise Microelectronics is expected to under-perform the Dongguan Tarry. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Cellwise Microelectronics is 1.19 times less risky than Dongguan Tarry. The stock trades about -0.18 of its potential returns per unit of risk. The Dongguan Tarry Electronics is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 6,975 in Dongguan Tarry Electronics on October 16, 2024 and sell it today you would lose (731.00) from holding Dongguan Tarry Electronics or give up 10.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Cellwise Microelectr vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Guangdong Cellwise |
| Dongguan Tarry Elect |
Guangdong Cellwise and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Cellwise and Dongguan Tarry
The main advantage of trading using opposite Guangdong Cellwise and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Cellwise position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.The idea behind Guangdong Cellwise Microelectronics and Dongguan Tarry Electronics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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