Correlation Between Xinjiang Baodi and Will Semiconductor

Can any of the company-specific risk be diversified away by investing in both Xinjiang Baodi and Will Semiconductor 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 Xinjiang Baodi and Will Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xinjiang Baodi Mining and Will Semiconductor Co, you can compare the effects of market volatilities on Xinjiang Baodi and Will Semiconductor 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 Xinjiang Baodi with a short position of Will Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Will Semiconductor.

Diversification Opportunities for Xinjiang Baodi and Will Semiconductor

-0.5

Correlation Coefficient

Xinjiang Baodi  Will Semiconductor

Very good diversification

The 3 months correlation between Xinjiang and Will is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Will Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Will Semiconductor and Xinjiang Baodi 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 Xinjiang Baodi Mining are associated (or correlated) with Will Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Will Semiconductor has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Will Semiconductor go up and down completely randomly.

Pair Corralation between Xinjiang Baodi and Will Semiconductor

Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 22.22 times less return on investment than Will Semiconductor. In addition to that, Xinjiang Baodi is 1.04 times more volatile than Will Semiconductor Co. It trades about 0.0 of its total potential returns per unit of risk. Will Semiconductor Co is currently generating about 0.02 per unit of volatility. If you would invest  9,300  in Will Semiconductor Co on October 4, 2024 and sell it today you would earn a total of  758.00  from holding Will Semiconductor Co or generate 8.15% return on investment over 90 days.

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

Xinjiang Baodi Mining  vs.  Will Semiconductor Co

Xinjiang Baodi Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xinjiang Baodi Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xinjiang Baodi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Will Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Will Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Xinjiang Baodi and Will Semiconductor

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

The idea behind Xinjiang Baodi Mining and Will Semiconductor Co 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.