Correlation Between NXP Semiconductors and JINHUI SHIPPING
Can any of the company-specific risk be diversified away by investing in both NXP Semiconductors and JINHUI SHIPPING at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NXP Semiconductors and JINHUI SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXP Semiconductors NV and JINHUI SHIPPING, you can compare the effects of market volatilities on NXP Semiconductors and JINHUI SHIPPING 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 NXP Semiconductors with a short position of JINHUI SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXP Semiconductors and JINHUI SHIPPING.
Diversification Opportunities for NXP Semiconductors and JINHUI SHIPPING
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NXP and JINHUI is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NXP Semiconductors NV and JINHUI SHIPPING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JINHUI SHIPPING and NXP Semiconductors 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 NXP Semiconductors NV are associated (or correlated) with JINHUI SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JINHUI SHIPPING has no effect on the direction of NXP Semiconductors i.e., NXP Semiconductors and JINHUI SHIPPING go up and down completely randomly.
Pair Corralation between NXP Semiconductors and JINHUI SHIPPING
Assuming the 90 days trading horizon NXP Semiconductors is expected to generate 12.82 times less return on investment than JINHUI SHIPPING. But when comparing it to its historical volatility, NXP Semiconductors NV is 1.04 times less risky than JINHUI SHIPPING. It trades about 0.02 of its potential returns per unit of risk. JINHUI SHIPPING is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 51.00 in JINHUI SHIPPING on September 1, 2024 and sell it today you would earn a total of 6.00 from holding JINHUI SHIPPING or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NXP Semiconductors NV vs. JINHUI SHIPPING
Performance |
| Timeline |
| NXP Semiconductors |
| JINHUI SHIPPING |
NXP Semiconductors and JINHUI SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXP Semiconductors and JINHUI SHIPPING
The main advantage of trading using opposite NXP Semiconductors and JINHUI SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXP Semiconductors position performs unexpectedly, JINHUI SHIPPING 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 JINHUI SHIPPING will offset losses from the drop in JINHUI SHIPPING's long position.| NXP Semiconductors vs. ONWARD MEDICAL BV | NXP Semiconductors vs. British American Tobacco | NXP Semiconductors vs. NetSol Technologies | NXP Semiconductors vs. Uber Technologies |
| JINHUI SHIPPING vs. QBE Insurance Group | JINHUI SHIPPING vs. United Utilities Group | JINHUI SHIPPING vs. Ping An Insurance | JINHUI SHIPPING vs. Zoom Video Communications |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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