Correlation Between Semiconductor Manufacturing and Jinling Hotel
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By analyzing existing cross correlation between Semiconductor Manufacturing Electronics and Jinling Hotel Corp, you can compare the effects of market volatilities on Semiconductor Manufacturing and Jinling Hotel 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 Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Jinling Hotel.
Diversification Opportunities for Semiconductor Manufacturing and Jinling Hotel
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Semiconductor and Jinling is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing El and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp 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 Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Jinling Hotel go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Jinling Hotel
Assuming the 90 days trading horizon Semiconductor Manufacturing Electronics is expected to generate 1.46 times more return on investment than Jinling Hotel. However, Semiconductor Manufacturing is 1.46 times more volatile than Jinling Hotel Corp. It trades about 0.13 of its potential returns per unit of risk. Jinling Hotel Corp is currently generating about 0.01 per unit of risk. If you would invest 500.00 in Semiconductor Manufacturing Electronics on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Semiconductor Manufacturing Electronics or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Manufacturing El vs. Jinling Hotel Corp
Performance |
| Timeline |
| Semiconductor Manufacturing |
| Jinling Hotel Corp |
Semiconductor Manufacturing and Jinling Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Jinling Hotel
The main advantage of trading using opposite Semiconductor Manufacturing and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Jinling Hotel 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 Jinling Hotel will offset losses from the drop in Jinling Hotel's long position.The idea behind Semiconductor Manufacturing Electronics and Jinling Hotel Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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