Correlation Between Nexchip Semiconductor and Xiangyang Automobile
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By analyzing existing cross correlation between Nexchip Semiconductor Corp and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Nexchip Semiconductor and Xiangyang Automobile 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 Nexchip Semiconductor with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexchip Semiconductor and Xiangyang Automobile.
Diversification Opportunities for Nexchip Semiconductor and Xiangyang Automobile
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nexchip and Xiangyang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nexchip Semiconductor Corp and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Nexchip Semiconductor 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 Nexchip Semiconductor Corp are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Nexchip Semiconductor i.e., Nexchip Semiconductor and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Nexchip Semiconductor and Xiangyang Automobile
Assuming the 90 days trading horizon Nexchip Semiconductor Corp is expected to generate 1.21 times more return on investment than Xiangyang Automobile. However, Nexchip Semiconductor is 1.21 times more volatile than Xiangyang Automobile Bearing. It trades about 0.27 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.22 per unit of risk. If you would invest 1,375 in Nexchip Semiconductor Corp on September 11, 2024 and sell it today you would earn a total of 1,375 from holding Nexchip Semiconductor Corp or generate 100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nexchip Semiconductor Corp vs. Xiangyang Automobile Bearing
Performance |
Timeline |
Nexchip Semiconductor |
Xiangyang Automobile |
Nexchip Semiconductor and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nexchip Semiconductor and Xiangyang Automobile
The main advantage of trading using opposite Nexchip Semiconductor and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexchip Semiconductor position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.Nexchip Semiconductor vs. PetroChina Co Ltd | Nexchip Semiconductor vs. China Mobile Limited | Nexchip Semiconductor vs. CNOOC Limited | Nexchip Semiconductor vs. Ping An Insurance |
Xiangyang Automobile vs. Lutian Machinery Co | Xiangyang Automobile vs. China Longyuan Power | Xiangyang Automobile vs. PetroChina Co Ltd | Xiangyang Automobile vs. Bank of China |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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