Correlation Between Semiconductor Manufacturing and Jiangsu Broadcasting
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By analyzing existing cross correlation between Semiconductor Manufacturing Electronics and Jiangsu Broadcasting Cable, you can compare the effects of market volatilities on Semiconductor Manufacturing and Jiangsu Broadcasting 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 Semiconductor Manufacturing with a short position of Jiangsu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Jiangsu Broadcasting.
Diversification Opportunities for Semiconductor Manufacturing and Jiangsu Broadcasting
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Semiconductor and Jiangsu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing El and Jiangsu Broadcasting Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Broadcasting and Semiconductor Manufacturing 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 Semiconductor Manufacturing Electronics are associated (or correlated) with Jiangsu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Broadcasting has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Jiangsu Broadcasting go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Jiangsu Broadcasting
Assuming the 90 days trading horizon Semiconductor Manufacturing Electronics is expected to under-perform the Jiangsu Broadcasting. In addition to that, Semiconductor Manufacturing is 1.23 times more volatile than Jiangsu Broadcasting Cable. It trades about -0.01 of its total potential returns per unit of risk. Jiangsu Broadcasting Cable is currently generating about 0.01 per unit of volatility. If you would invest 311.00 in Jiangsu Broadcasting Cable on November 7, 2024 and sell it today you would earn a total of 10.00 from holding Jiangsu Broadcasting Cable or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.87% |
| Values | Daily Returns |
Semiconductor Manufacturing El vs. Jiangsu Broadcasting Cable
Performance |
| Timeline |
| Semiconductor Manufacturing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Broadcasting |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Semiconductor Manufacturing and Jiangsu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Jiangsu Broadcasting
The main advantage of trading using opposite Semiconductor Manufacturing and Jiangsu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Jiangsu Broadcasting 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 Jiangsu Broadcasting will offset losses from the drop in Jiangsu Broadcasting's long position.The idea behind Semiconductor Manufacturing Electronics and Jiangsu Broadcasting Cable 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.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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