Correlation Between Yuanjie Semiconductor and Hengdian Entertainment
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By analyzing existing cross correlation between Yuanjie Semiconductor Technology and Hengdian Entertainment Co, you can compare the effects of market volatilities on Yuanjie Semiconductor and Hengdian Entertainment 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 Yuanjie Semiconductor with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanjie Semiconductor and Hengdian Entertainment.
Diversification Opportunities for Yuanjie Semiconductor and Hengdian Entertainment
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuanjie and Hengdian is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Yuanjie Semiconductor Technolo and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Yuanjie 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 Yuanjie Semiconductor Technology are associated (or correlated) with Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of Yuanjie Semiconductor i.e., Yuanjie Semiconductor and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Yuanjie Semiconductor and Hengdian Entertainment
Assuming the 90 days trading horizon Yuanjie Semiconductor Technology is expected to generate 1.24 times more return on investment than Hengdian Entertainment. However, Yuanjie Semiconductor is 1.24 times more volatile than Hengdian Entertainment Co. It trades about 0.03 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.01 per unit of risk. If you would invest 14,273 in Yuanjie Semiconductor Technology on October 30, 2024 and sell it today you would earn a total of 288.00 from holding Yuanjie Semiconductor Technology or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanjie Semiconductor Technolo vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Yuanjie Semiconductor |
| Hengdian Entertainment |
Yuanjie Semiconductor and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanjie Semiconductor and Hengdian Entertainment
The main advantage of trading using opposite Yuanjie Semiconductor and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanjie Semiconductor position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.The idea behind Yuanjie Semiconductor Technology and Hengdian Entertainment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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