Correlation Between Union Semiconductor and Anhui Xinhua
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By analyzing existing cross correlation between Union Semiconductor Co and Anhui Xinhua Media, you can compare the effects of market volatilities on Union Semiconductor and Anhui Xinhua 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 Union Semiconductor with a short position of Anhui Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Semiconductor and Anhui Xinhua.
Diversification Opportunities for Union Semiconductor and Anhui Xinhua
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and Anhui is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Union Semiconductor Co and Anhui Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Xinhua Media and Union 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 Union Semiconductor Co are associated (or correlated) with Anhui Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Xinhua Media has no effect on the direction of Union Semiconductor i.e., Union Semiconductor and Anhui Xinhua go up and down completely randomly.
Pair Corralation between Union Semiconductor and Anhui Xinhua
Assuming the 90 days trading horizon Union Semiconductor Co is expected to under-perform the Anhui Xinhua. But the stock apears to be less risky and, when comparing its historical volatility, Union Semiconductor Co is 1.13 times less risky than Anhui Xinhua. The stock trades about -0.06 of its potential returns per unit of risk. The Anhui Xinhua Media is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 698.00 in Anhui Xinhua Media on October 14, 2024 and sell it today you would lose (22.00) from holding Anhui Xinhua Media or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Semiconductor Co vs. Anhui Xinhua Media
Performance |
| Timeline |
| Union Semiconductor |
| Anhui Xinhua Media |
Union Semiconductor and Anhui Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Semiconductor and Anhui Xinhua
The main advantage of trading using opposite Union Semiconductor and Anhui Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Semiconductor position performs unexpectedly, Anhui Xinhua 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 Anhui Xinhua will offset losses from the drop in Anhui Xinhua's long position.The idea behind Union Semiconductor Co and Anhui Xinhua Media 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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