Correlation Between Southchip Semiconductor and Xiamen Wanli
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By analyzing existing cross correlation between Southchip Semiconductor Technology and Xiamen Wanli Stone, you can compare the effects of market volatilities on Southchip Semiconductor and Xiamen Wanli 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 Southchip Semiconductor with a short position of Xiamen Wanli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southchip Semiconductor and Xiamen Wanli.
Diversification Opportunities for Southchip Semiconductor and Xiamen Wanli
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southchip and Xiamen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Southchip Semiconductor Techno and Xiamen Wanli Stone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Wanli Stone and Southchip 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 Southchip Semiconductor Technology are associated (or correlated) with Xiamen Wanli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Wanli Stone has no effect on the direction of Southchip Semiconductor i.e., Southchip Semiconductor and Xiamen Wanli go up and down completely randomly.
Pair Corralation between Southchip Semiconductor and Xiamen Wanli
Assuming the 90 days trading horizon Southchip Semiconductor Technology is expected to under-perform the Xiamen Wanli. But the stock apears to be less risky and, when comparing its historical volatility, Southchip Semiconductor Technology is 1.14 times less risky than Xiamen Wanli. The stock trades about -0.26 of its potential returns per unit of risk. The Xiamen Wanli Stone is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 3,368 in Xiamen Wanli Stone on October 9, 2024 and sell it today you would lose (277.00) from holding Xiamen Wanli Stone or give up 8.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Southchip Semiconductor Techno vs. Xiamen Wanli Stone
Performance |
Timeline |
Southchip Semiconductor |
Xiamen Wanli Stone |
Southchip Semiconductor and Xiamen Wanli Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southchip Semiconductor and Xiamen Wanli
The main advantage of trading using opposite Southchip Semiconductor and Xiamen Wanli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southchip Semiconductor position performs unexpectedly, Xiamen Wanli 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 Xiamen Wanli will offset losses from the drop in Xiamen Wanli's long position.The idea behind Southchip Semiconductor Technology and Xiamen Wanli Stone 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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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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