Correlation Between Xinya Electronic and TongFu Microelectronics
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By analyzing existing cross correlation between Xinya Electronic Co and TongFu Microelectronics Co, you can compare the effects of market volatilities on Xinya Electronic 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 Xinya Electronic with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinya Electronic and TongFu Microelectronics.
Diversification Opportunities for Xinya Electronic and TongFu Microelectronics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinya and TongFu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xinya Electronic Co and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Xinya Electronic 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 Xinya Electronic Co 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 Xinya Electronic i.e., Xinya Electronic and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Xinya Electronic and TongFu Microelectronics
Assuming the 90 days trading horizon Xinya Electronic is expected to generate 1.09 times less return on investment than TongFu Microelectronics. In addition to that, Xinya Electronic is 1.04 times more volatile than TongFu Microelectronics Co. It trades about 0.05 of its total potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.05 per unit of volatility. If you would invest 1,667 in TongFu Microelectronics Co on September 24, 2024 and sell it today you would earn a total of 1,351 from holding TongFu Microelectronics Co or generate 81.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xinya Electronic Co vs. TongFu Microelectronics Co
Performance |
Timeline |
Xinya Electronic |
TongFu Microelectronics |
Xinya Electronic and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xinya Electronic and TongFu Microelectronics
The main advantage of trading using opposite Xinya Electronic and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinya Electronic 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.Xinya Electronic vs. Kweichow Moutai Co | Xinya Electronic vs. Contemporary Amperex Technology | Xinya Electronic vs. G bits Network Technology | Xinya Electronic vs. BYD Co Ltd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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