Correlation Between China Nonferrous and Olympic Circuit
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By analyzing existing cross correlation between China Nonferrous Metal and Olympic Circuit Technology, you can compare the effects of market volatilities on China Nonferrous and Olympic Circuit 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 China Nonferrous with a short position of Olympic Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Nonferrous and Olympic Circuit.
Diversification Opportunities for China Nonferrous and Olympic Circuit
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Olympic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Nonferrous Metal and Olympic Circuit Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Circuit Tech and China Nonferrous 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 China Nonferrous Metal are associated (or correlated) with Olympic Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Circuit Tech has no effect on the direction of China Nonferrous i.e., China Nonferrous and Olympic Circuit go up and down completely randomly.
Pair Corralation between China Nonferrous and Olympic Circuit
Assuming the 90 days trading horizon China Nonferrous is expected to generate 15.42 times less return on investment than Olympic Circuit. But when comparing it to its historical volatility, China Nonferrous Metal is 1.77 times less risky than Olympic Circuit. It trades about 0.01 of its potential returns per unit of risk. Olympic Circuit Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,925 in Olympic Circuit Technology on September 25, 2024 and sell it today you would earn a total of 1,001 from holding Olympic Circuit Technology or generate 52.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Nonferrous Metal vs. Olympic Circuit Technology
Performance |
Timeline |
China Nonferrous Metal |
Olympic Circuit Tech |
China Nonferrous and Olympic Circuit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Nonferrous and Olympic Circuit
The main advantage of trading using opposite China Nonferrous and Olympic Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Nonferrous position performs unexpectedly, Olympic Circuit 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 Olympic Circuit will offset losses from the drop in Olympic Circuit's long position.China Nonferrous vs. Zijin Mining Group | China Nonferrous vs. Wanhua Chemical Group | China Nonferrous vs. Baoshan Iron Steel | China Nonferrous vs. Shandong Gold Mining |
Olympic Circuit vs. China Nonferrous Metal | Olympic Circuit vs. Shenzhen Topway Video | Olympic Circuit vs. Haima Automobile Group | Olympic Circuit vs. Hefei Metalforming Mach |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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