Correlation Between Pengxin International and Nexchip Semiconductor
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By analyzing existing cross correlation between Pengxin International Mining and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Pengxin International and Nexchip Semiconductor 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 Pengxin International with a short position of Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Nexchip Semiconductor.
Diversification Opportunities for Pengxin International and Nexchip Semiconductor
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pengxin and Nexchip is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Nexchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexchip Semiconductor has no effect on the direction of Pengxin International i.e., Pengxin International and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Pengxin International and Nexchip Semiconductor
Assuming the 90 days trading horizon Pengxin International is expected to generate 1.4 times less return on investment than Nexchip Semiconductor. But when comparing it to its historical volatility, Pengxin International Mining is 1.27 times less risky than Nexchip Semiconductor. It trades about 0.23 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Nexchip Semiconductor Corp on September 5, 2024 and sell it today you would earn a total of 1,315 from holding Nexchip Semiconductor Corp or generate 90.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pengxin International Mining vs. Nexchip Semiconductor Corp
Performance |
Timeline |
Pengxin International |
Nexchip Semiconductor |
Pengxin International and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pengxin International and Nexchip Semiconductor
The main advantage of trading using opposite Pengxin International and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Nexchip Semiconductor 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 Nexchip Semiconductor will offset losses from the drop in Nexchip Semiconductor's long position.Pengxin International vs. Gem Year Industrial Co | Pengxin International vs. ButOne Information Corp | Pengxin International vs. CITIC Metal Co | Pengxin International vs. Qinghaihuading Industrial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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