Correlation Between Union Semiconductor and Xingguang Agricultural
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By analyzing existing cross correlation between Union Semiconductor Co and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Union Semiconductor and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Semiconductor and Xingguang Agricultural.
Diversification Opportunities for Union Semiconductor and Xingguang Agricultural
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and Xingguang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Union Semiconductor Co and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Union Semiconductor i.e., Union Semiconductor and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Union Semiconductor and Xingguang Agricultural
Assuming the 90 days trading horizon Union Semiconductor Co is expected to generate 0.57 times more return on investment than Xingguang Agricultural. However, Union Semiconductor Co is 1.76 times less risky than Xingguang Agricultural. It trades about -0.03 of its potential returns per unit of risk. Xingguang Agricultural Mach is currently generating about -0.34 per unit of risk. If you would invest 863.00 in Union Semiconductor Co on November 3, 2024 and sell it today you would lose (14.00) from holding Union Semiconductor Co or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Semiconductor Co vs. Xingguang Agricultural Mach
Performance |
| Timeline |
| Union Semiconductor |
| Xingguang Agricultural |
Union Semiconductor and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Semiconductor and Xingguang Agricultural
The main advantage of trading using opposite Union Semiconductor and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Semiconductor position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural's long position.The idea behind Union Semiconductor Co and Xingguang Agricultural Mach 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.
| Xingguang Agricultural vs. Industrial and Commercial | Xingguang Agricultural vs. Kweichow Moutai Co | Xingguang Agricultural vs. Agricultural Bank of | Xingguang Agricultural vs. China Mobile Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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