Correlation Between Nexchip Semiconductor and Pengxin International
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By analyzing existing cross correlation between Nexchip Semiconductor Corp and Pengxin International Mining, you can compare the effects of market volatilities on Nexchip Semiconductor and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexchip Semiconductor and Pengxin International.
Diversification Opportunities for Nexchip Semiconductor and Pengxin International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nexchip and Pengxin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nexchip Semiconductor Corp and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Nexchip Semiconductor i.e., Nexchip Semiconductor and Pengxin International go up and down completely randomly.
Pair Corralation between Nexchip Semiconductor and Pengxin International
Assuming the 90 days trading horizon Nexchip Semiconductor Corp is expected to generate 1.26 times more return on investment than Pengxin International. However, Nexchip Semiconductor is 1.26 times more volatile than Pengxin International Mining. It trades about 0.26 of its potential returns per unit of risk. Pengxin International Mining is currently generating about 0.22 per unit of risk. If you would invest 1,422 in Nexchip Semiconductor Corp on September 6, 2024 and sell it today you would earn a total of 1,359 from holding Nexchip Semiconductor Corp or generate 95.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nexchip Semiconductor Corp vs. Pengxin International Mining
Performance |
Timeline |
Nexchip Semiconductor |
Pengxin International |
Nexchip Semiconductor and Pengxin International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nexchip Semiconductor and Pengxin International
The main advantage of trading using opposite Nexchip Semiconductor and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexchip Semiconductor position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.Nexchip Semiconductor vs. Industrial and Commercial | Nexchip Semiconductor vs. Agricultural Bank of | Nexchip Semiconductor vs. China Construction Bank | Nexchip Semiconductor vs. Bank of China |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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