Correlation Between Peijia Medical and Semiconductor Manufacturing

Can any of the company-specific risk be diversified away by investing in both Peijia Medical and Semiconductor Manufacturing at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Peijia Medical and Semiconductor Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peijia Medical Limited and Semiconductor Manufacturing International, you can compare the effects of market volatilities on Peijia Medical and Semiconductor Manufacturing 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 Peijia Medical with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and Semiconductor Manufacturing.

Diversification Opportunities for Peijia Medical and Semiconductor Manufacturing

-0.04

Correlation Coefficient

Peijia Medical  Semiconductor Manufacturing

Good diversification

The 3 months correlation between Peijia and Semiconductor is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and Peijia Medical 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 Peijia Medical Limited are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Peijia Medical i.e., Peijia Medical and Semiconductor Manufacturing go up and down completely randomly.

Pair Corralation between Peijia Medical and Semiconductor Manufacturing

Assuming the 90 days horizon Peijia Medical Limited is expected to under-perform the Semiconductor Manufacturing. In addition to that, Peijia Medical is 4.27 times more volatile than Semiconductor Manufacturing International. It trades about -0.05 of its total potential returns per unit of risk. Semiconductor Manufacturing International is currently generating about 0.05 per unit of volatility. If you would invest  334.00  in Semiconductor Manufacturing International on October 23, 2024 and sell it today you would earn a total of  6.00  from holding Semiconductor Manufacturing International or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Peijia Medical Limited  vs.  Semiconductor Manufacturing In

Peijia Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peijia Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Semiconductor Manufacturing

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Manufacturing International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Semiconductor Manufacturing is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Peijia Medical and Semiconductor Manufacturing

The main advantage of trading using opposite Peijia Medical and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.

The idea behind Peijia Medical Limited and Semiconductor Manufacturing International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.