Correlation Between Techshine Electronics and Huaxi Securities
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By analyzing existing cross correlation between Techshine Electronics Co and Huaxi Securities Co, you can compare the effects of market volatilities on Techshine Electronics and Huaxi Securities 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 Techshine Electronics with a short position of Huaxi Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techshine Electronics and Huaxi Securities.
Diversification Opportunities for Techshine Electronics and Huaxi Securities
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Techshine and Huaxi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Techshine Electronics Co and Huaxi Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaxi Securities and Techshine Electronics 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 Techshine Electronics Co are associated (or correlated) with Huaxi Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaxi Securities has no effect on the direction of Techshine Electronics i.e., Techshine Electronics and Huaxi Securities go up and down completely randomly.
Pair Corralation between Techshine Electronics and Huaxi Securities
Assuming the 90 days trading horizon Techshine Electronics Co is expected to generate 2.3 times more return on investment than Huaxi Securities. However, Techshine Electronics is 2.3 times more volatile than Huaxi Securities Co. It trades about 0.13 of its potential returns per unit of risk. Huaxi Securities Co is currently generating about 0.03 per unit of risk. If you would invest 1,990 in Techshine Electronics Co on September 29, 2024 and sell it today you would earn a total of 135.00 from holding Techshine Electronics Co or generate 6.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
Techshine Electronics Co vs. Huaxi Securities Co
Performance |
Timeline |
Techshine Electronics |
Huaxi Securities |
Techshine Electronics and Huaxi Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Techshine Electronics and Huaxi Securities
The main advantage of trading using opposite Techshine Electronics and Huaxi Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techshine Electronics position performs unexpectedly, Huaxi Securities 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 Huaxi Securities will offset losses from the drop in Huaxi Securities' long position.The idea behind Techshine Electronics Co and Huaxi Securities Co 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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