Correlation Between Sinocat Environmental and TongFu Microelectronics
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By analyzing existing cross correlation between Sinocat Environmental Technology and TongFu Microelectronics Co, you can compare the effects of market volatilities on Sinocat Environmental 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 Sinocat Environmental with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and TongFu Microelectronics.
Diversification Opportunities for Sinocat Environmental and TongFu Microelectronics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinocat and TongFu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and Sinocat Environmental 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 Sinocat Environmental Technology 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 Sinocat Environmental i.e., Sinocat Environmental and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Sinocat Environmental and TongFu Microelectronics
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to generate 0.95 times more return on investment than TongFu Microelectronics. However, Sinocat Environmental Technology is 1.05 times less risky than TongFu Microelectronics. It trades about 0.27 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.2 per unit of risk. If you would invest 1,263 in Sinocat Environmental Technology on September 12, 2024 and sell it today you would earn a total of 1,068 from holding Sinocat Environmental Technology or generate 84.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sinocat Environmental Technolo vs. TongFu Microelectronics Co
Performance |
Timeline |
Sinocat Environmental |
TongFu Microelectronics |
Sinocat Environmental and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinocat Environmental and TongFu Microelectronics
The main advantage of trading using opposite Sinocat Environmental and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental 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.Sinocat Environmental vs. Lutian Machinery Co | Sinocat Environmental vs. PetroChina Co Ltd | Sinocat Environmental vs. Bank of China | Sinocat Environmental vs. Gansu Jiu Steel |
TongFu Microelectronics vs. Gansu Jiu Steel | TongFu Microelectronics vs. Shandong Mining Machinery | TongFu Microelectronics vs. Aba Chemicals Corp | TongFu Microelectronics vs. BlueFocus Communication Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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