Correlation Between Semiconductor Manufacturing and Jiangsu GDK
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By analyzing existing cross correlation between Semiconductor Manufacturing Intl and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Semiconductor Manufacturing and Jiangsu GDK 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 GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and Jiangsu GDK.
Diversification Opportunities for Semiconductor Manufacturing and Jiangsu GDK
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semiconductor and Jiangsu is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology 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 GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and Jiangsu GDK
Assuming the 90 days trading horizon Semiconductor Manufacturing Intl is expected to generate 1.15 times more return on investment than Jiangsu GDK. However, Semiconductor Manufacturing is 1.15 times more volatile than Jiangsu GDK Biotechnology. It trades about 0.05 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about -0.33 per unit of risk. If you would invest 9,010 in Semiconductor Manufacturing Intl on October 30, 2024 and sell it today you would earn a total of 384.00 from holding Semiconductor Manufacturing Intl or generate 4.26% 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 GDK Biotechnology
Performance |
| Timeline |
| Semiconductor Manufacturing |
| Jiangsu GDK Biotechnology |
Semiconductor Manufacturing and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and Jiangsu GDK
The main advantage of trading using opposite Semiconductor Manufacturing and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing position performs unexpectedly, Jiangsu GDK 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 GDK will offset losses from the drop in Jiangsu GDK's long position.The idea behind Semiconductor Manufacturing Intl and Jiangsu GDK Biotechnology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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