Correlation Between Southchip Semiconductor and Hengli Industrial
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By analyzing existing cross correlation between Southchip Semiconductor Technology and Hengli Industrial Development, you can compare the effects of market volatilities on Southchip Semiconductor and Hengli Industrial 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 Southchip Semiconductor with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southchip Semiconductor and Hengli Industrial.
Diversification Opportunities for Southchip Semiconductor and Hengli Industrial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southchip and Hengli is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Southchip Semiconductor Techno and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Southchip 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 Southchip Semiconductor Technology are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Southchip Semiconductor i.e., Southchip Semiconductor and Hengli Industrial go up and down completely randomly.
Pair Corralation between Southchip Semiconductor and Hengli Industrial
Assuming the 90 days trading horizon Southchip Semiconductor Technology is expected to under-perform the Hengli Industrial. In addition to that, Southchip Semiconductor is 1.03 times more volatile than Hengli Industrial Development. It trades about -0.29 of its total potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.28 per unit of volatility. If you would invest 235.00 in Hengli Industrial Development on October 7, 2024 and sell it today you would lose (34.00) from holding Hengli Industrial Development or give up 14.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southchip Semiconductor Techno vs. Hengli Industrial Development
Performance |
| Timeline |
| Southchip Semiconductor |
| Hengli Industrial |
Southchip Semiconductor and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southchip Semiconductor and Hengli Industrial
The main advantage of trading using opposite Southchip Semiconductor and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southchip Semiconductor position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.The idea behind Southchip Semiconductor Technology and Hengli Industrial Development 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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