Correlation Between Fujian Newland and Rising Nonferrous
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By analyzing existing cross correlation between Fujian Newland Computer and Rising Nonferrous Metals, you can compare the effects of market volatilities on Fujian Newland and Rising Nonferrous 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 Fujian Newland with a short position of Rising Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Rising Nonferrous.
Diversification Opportunities for Fujian Newland and Rising Nonferrous
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Rising is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of Fujian Newland i.e., Fujian Newland and Rising Nonferrous go up and down completely randomly.
Pair Corralation between Fujian Newland and Rising Nonferrous
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 1.23 times more return on investment than Rising Nonferrous. However, Fujian Newland is 1.23 times more volatile than Rising Nonferrous Metals. It trades about 0.18 of its potential returns per unit of risk. Rising Nonferrous Metals is currently generating about 0.07 per unit of risk. If you would invest 1,423 in Fujian Newland Computer on September 26, 2024 and sell it today you would earn a total of 634.00 from holding Fujian Newland Computer or generate 44.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fujian Newland Computer vs. Rising Nonferrous Metals
Performance |
Timeline |
Fujian Newland Computer |
Rising Nonferrous Metals |
Fujian Newland and Rising Nonferrous Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fujian Newland and Rising Nonferrous
The main advantage of trading using opposite Fujian Newland and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Rising Nonferrous 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 Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. China Construction Bank | Fujian Newland vs. Bank of China |
Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Wanhua Chemical Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Shandong Gold Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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