Correlation Between Anhui Huaheng and TongFu Microelectronics
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and TongFu Microelectronics Co, you can compare the effects of market volatilities on Anhui Huaheng and TongFu Microelectronics 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 Anhui Huaheng with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and TongFu Microelectronics.
Diversification Opportunities for Anhui Huaheng and TongFu Microelectronics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anhui and TongFu is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Anhui Huaheng 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 Anhui Huaheng Biotechnology are associated (or correlated) with TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Anhui Huaheng and TongFu Microelectronics
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the TongFu Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Huaheng Biotechnology is 1.63 times less risky than TongFu Microelectronics. The stock trades about -0.4 of its potential returns per unit of risk. The TongFu Microelectronics Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,987 in TongFu Microelectronics Co on October 25, 2024 and sell it today you would lose (100.00) from holding TongFu Microelectronics Co or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. TongFu Microelectronics Co
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| TongFu Microelectronics |
Anhui Huaheng and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and TongFu Microelectronics
The main advantage of trading using opposite Anhui Huaheng and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, TongFu Microelectronics 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 TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.| Anhui Huaheng vs. Holitech Technology Co | Anhui Huaheng vs. Kangping Technology Co | Anhui Huaheng vs. Olympic Circuit Technology | Anhui Huaheng vs. HanS Laser Tech |
| TongFu Microelectronics vs. Kweichow Moutai Co | TongFu Microelectronics vs. NAURA Technology Group | TongFu Microelectronics vs. APT Medical | TongFu Microelectronics vs. BYD Co Ltd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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