Correlation Between Semiconductor Manufacturing and Xinya Electronic
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By analyzing existing cross correlation between Semiconductor Manufacturing Electronics and Xinya Electronic Co, you can compare the effects of market volatilities on Semiconductor Manufacturing and Xinya Electronic 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 Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Xinya Electronic.
Diversification Opportunities for Semiconductor Manufacturing and Xinya Electronic
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Semiconductor and Xinya is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing El and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic 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 Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Xinya Electronic go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Xinya Electronic
Assuming the 90 days trading horizon Semiconductor Manufacturing Electronics is expected to under-perform the Xinya Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Semiconductor Manufacturing Electronics is 2.27 times less risky than Xinya Electronic. The stock trades about -0.29 of its potential returns per unit of risk. The Xinya Electronic Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,496 in Xinya Electronic Co on October 22, 2024 and sell it today you would lose (40.00) from holding Xinya Electronic Co or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Manufacturing El vs. Xinya Electronic Co
Performance |
| Timeline |
| Semiconductor Manufacturing |
| Xinya Electronic |
Semiconductor Manufacturing and Xinya Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Xinya Electronic
The main advantage of trading using opposite Semiconductor Manufacturing and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.The idea behind Semiconductor Manufacturing Electronics and Xinya Electronic Co 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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