Correlation Between Semiconductor Manufacturing and Tianjin Jingwei

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

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

Diversification Opportunities for Semiconductor Manufacturing and Tianjin Jingwei

-0.06

Correlation Coefficient

Semiconductor Manufacturing  Tianjin Jingwei

Good diversification

The 3 months correlation between Semiconductor and Tianjin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In and Tianjin Jingwei Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Jingwei Electric and Semiconductor Manufacturing 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 Semiconductor Manufacturing Intl are associated (or correlated) with Tianjin Jingwei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Jingwei Electric has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Tianjin Jingwei go up and down completely randomly.

Pair Corralation between Semiconductor Manufacturing and Tianjin Jingwei

Assuming the 90 days trading horizon Semiconductor Manufacturing Intl is expected to under-perform the Tianjin Jingwei. In addition to that, Semiconductor Manufacturing is 1.06 times more volatile than Tianjin Jingwei Electric. It trades about -0.04 of its total potential returns per unit of risk. Tianjin Jingwei Electric is currently generating about -0.04 per unit of volatility. If you would invest  977.00  in Tianjin Jingwei Electric on December 28, 2024 and sell it today you would lose (77.00) from holding Tianjin Jingwei Electric or give up 7.88% of portfolio value over 90 days.

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

Semiconductor Manufacturing In  vs.  Tianjin Jingwei Electric

Semiconductor Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semiconductor Manufacturing Intl 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.

Tianjin Jingwei Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tianjin Jingwei Electric 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 Semiconductor Manufacturing and Tianjin Jingwei

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

The idea behind Semiconductor Manufacturing Intl and Tianjin Jingwei Electric 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..