Correlation Between Guangdong Qunxing and TongFu Microelectronics
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By analyzing existing cross correlation between Guangdong Qunxing Toys and TongFu Microelectronics Co, you can compare the effects of market volatilities on Guangdong Qunxing 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 Guangdong Qunxing with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Qunxing and TongFu Microelectronics.
Diversification Opportunities for Guangdong Qunxing and TongFu Microelectronics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and TongFu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Qunxing Toys and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Guangdong Qunxing 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 Guangdong Qunxing Toys 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 Guangdong Qunxing i.e., Guangdong Qunxing and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Guangdong Qunxing and TongFu Microelectronics
Assuming the 90 days trading horizon Guangdong Qunxing Toys is expected to generate 2.12 times more return on investment than TongFu Microelectronics. However, Guangdong Qunxing is 2.12 times more volatile than TongFu Microelectronics Co. It trades about 0.19 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.07 per unit of risk. If you would invest 653.00 in Guangdong Qunxing Toys on September 24, 2024 and sell it today you would earn a total of 101.00 from holding Guangdong Qunxing Toys or generate 15.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Qunxing Toys vs. TongFu Microelectronics Co
Performance |
Timeline |
Guangdong Qunxing Toys |
TongFu Microelectronics |
Guangdong Qunxing and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Qunxing and TongFu Microelectronics
The main advantage of trading using opposite Guangdong Qunxing and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Qunxing 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.Guangdong Qunxing vs. PetroChina Co Ltd | Guangdong Qunxing vs. China Mobile Limited | Guangdong Qunxing vs. CNOOC Limited | Guangdong Qunxing vs. Ping An Insurance |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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