Correlation Between NAURA Technology and Shenzhen Aisidi

Can any of the company-specific risk be diversified away by investing in both NAURA Technology and Shenzhen Aisidi 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 NAURA Technology and Shenzhen Aisidi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NAURA Technology Group and Shenzhen Aisidi Co, you can compare the effects of market volatilities on NAURA Technology and Shenzhen Aisidi 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 NAURA Technology with a short position of Shenzhen Aisidi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAURA Technology and Shenzhen Aisidi.

Diversification Opportunities for NAURA Technology and Shenzhen Aisidi

0.73

Correlation Coefficient

NAURA Technology  Shenzhen Aisidi

Poor diversification

The 3 months correlation between NAURA and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NAURA Technology Group and Shenzhen Aisidi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Aisidi and NAURA Technology 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 NAURA Technology Group are associated (or correlated) with Shenzhen Aisidi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Aisidi has no effect on the direction of NAURA Technology i.e., NAURA Technology and Shenzhen Aisidi go up and down completely randomly.

Pair Corralation between NAURA Technology and Shenzhen Aisidi

Assuming the 90 days trading horizon NAURA Technology Group is expected to under-perform the Shenzhen Aisidi. But the stock apears to be less risky and, when comparing its historical volatility, NAURA Technology Group is 2.48 times less risky than Shenzhen Aisidi. The stock trades about -0.17 of its potential returns per unit of risk. The Shenzhen Aisidi Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,525  in Shenzhen Aisidi Co on October 7, 2024 and sell it today you would lose (102.00) from holding Shenzhen Aisidi Co or give up 6.69% of portfolio value over 90 days.

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

NAURA Technology Group  vs.  Shenzhen Aisidi Co

NAURA Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAURA Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NAURA Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shenzhen Aisidi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Aisidi Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Aisidi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NAURA Technology and Shenzhen Aisidi

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

The idea behind NAURA Technology Group and Shenzhen Aisidi 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.