Correlation Between Semiconductor Manufacturing and Citic Guoan
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By analyzing existing cross correlation between Semiconductor Manufacturing Intl and Citic Guoan Wine, you can compare the effects of market volatilities on Semiconductor Manufacturing and Citic Guoan 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 Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Citic Guoan.
Diversification Opportunities for Semiconductor Manufacturing and Citic Guoan
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semiconductor and Citic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine 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 Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Citic Guoan go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Citic Guoan
Assuming the 90 days trading horizon Semiconductor Manufacturing Intl is expected to generate 1.29 times more return on investment than Citic Guoan. However, Semiconductor Manufacturing is 1.29 times more volatile than Citic Guoan Wine. It trades about -0.03 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.16 per unit of risk. If you would invest 10,189 in Semiconductor Manufacturing Intl on November 7, 2024 and sell it today you would lose (795.00) from holding Semiconductor Manufacturing Intl or give up 7.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Manufacturing In vs. Citic Guoan Wine
Performance |
| Timeline |
| Semiconductor Manufacturing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citic Guoan Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Semiconductor Manufacturing and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Citic Guoan
The main advantage of trading using opposite Semiconductor Manufacturing and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.The idea behind Semiconductor Manufacturing Intl and Citic Guoan Wine 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.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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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