Correlation Between Semiconductor Manufacturing and Jiangsu Jinling
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By analyzing existing cross correlation between Semiconductor Manufacturing Intl and Jiangsu Jinling Sports, you can compare the effects of market volatilities on Semiconductor Manufacturing and Jiangsu Jinling 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 Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Jiangsu Jinling.
Diversification Opportunities for Semiconductor Manufacturing and Jiangsu Jinling
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Semiconductor and Jiangsu is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In and Jiangsu Jinling Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Jinling Sports 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 Intl are associated (or correlated) with Jiangsu Jinling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Jinling Sports has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Jiangsu Jinling go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Jiangsu Jinling
Assuming the 90 days trading horizon Semiconductor Manufacturing Intl is expected to generate 0.99 times more return on investment than Jiangsu Jinling. However, Semiconductor Manufacturing Intl is 1.01 times less risky than Jiangsu Jinling. It trades about 0.07 of its potential returns per unit of risk. Jiangsu Jinling Sports is currently generating about -0.03 per unit of risk. If you would invest 4,237 in Semiconductor Manufacturing Intl on October 12, 2024 and sell it today you would earn a total of 5,081 from holding Semiconductor Manufacturing Intl or generate 119.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Manufacturing In vs. Jiangsu Jinling Sports
Performance |
| Timeline |
| Semiconductor Manufacturing |
| Jiangsu Jinling Sports |
Semiconductor Manufacturing and Jiangsu Jinling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Jiangsu Jinling
The main advantage of trading using opposite Semiconductor Manufacturing and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Jiangsu Jinling 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 Jiangsu Jinling will offset losses from the drop in Jiangsu Jinling's long position.The idea behind Semiconductor Manufacturing Intl and Jiangsu Jinling Sports 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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