Correlation Between Kuang Chi and Cambricon Technologies
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By analyzing existing cross correlation between Kuang Chi Technologies and Cambricon Technologies Corp, you can compare the effects of market volatilities on Kuang Chi and Cambricon Technologies 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 Kuang Chi with a short position of Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Cambricon Technologies.
Diversification Opportunities for Kuang Chi and Cambricon Technologies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuang and Cambricon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies and Kuang Chi 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 Kuang Chi Technologies are associated (or correlated) with Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Kuang Chi i.e., Kuang Chi and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Kuang Chi and Cambricon Technologies
Assuming the 90 days trading horizon Kuang Chi is expected to generate 1.46 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Kuang Chi Technologies is 1.25 times less risky than Cambricon Technologies. It trades about 0.28 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 22,400 in Cambricon Technologies Corp on September 26, 2024 and sell it today you would earn a total of 43,530 from holding Cambricon Technologies Corp or generate 194.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.33% |
Values | Daily Returns |
Kuang Chi Technologies vs. Cambricon Technologies Corp
Performance |
Timeline |
Kuang Chi Technologies |
Cambricon Technologies |
Kuang Chi and Cambricon Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kuang Chi and Cambricon Technologies
The main advantage of trading using opposite Kuang Chi and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.Kuang Chi vs. China Life Insurance | Kuang Chi vs. Cinda Securities Co | Kuang Chi vs. Piotech Inc A | Kuang Chi vs. Dongxing Sec Co |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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