Correlation Between Leaguer Shenzhen and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Leaguer Shenzhen MicroElectronics and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Leaguer Shenzhen and Shijiazhuang Tonhe 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 Leaguer Shenzhen with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaguer Shenzhen and Shijiazhuang Tonhe.
Diversification Opportunities for Leaguer Shenzhen and Shijiazhuang Tonhe
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leaguer and Shijiazhuang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Leaguer Shenzhen MicroElectron and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Leaguer Shenzhen 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 Leaguer Shenzhen MicroElectronics are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Leaguer Shenzhen i.e., Leaguer Shenzhen and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Leaguer Shenzhen and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Leaguer Shenzhen MicroElectronics is expected to generate 1.17 times more return on investment than Shijiazhuang Tonhe. However, Leaguer Shenzhen is 1.17 times more volatile than Shijiazhuang Tonhe Electronics. It trades about 0.16 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.12 per unit of risk. If you would invest 1,945 in Leaguer Shenzhen MicroElectronics on September 25, 2024 and sell it today you would earn a total of 933.00 from holding Leaguer Shenzhen MicroElectronics or generate 47.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Leaguer Shenzhen MicroElectron vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
Leaguer Shenzhen Mic |
Shijiazhuang Tonhe |
Leaguer Shenzhen and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leaguer Shenzhen and Shijiazhuang Tonhe
The main advantage of trading using opposite Leaguer Shenzhen and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaguer Shenzhen position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.Leaguer Shenzhen vs. Southchip Semiconductor Technology | Leaguer Shenzhen vs. Shanghai Yanpu Metal | Leaguer Shenzhen vs. GRINM Semiconductor Materials | Leaguer Shenzhen vs. Western Metal Materials |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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