Correlation Between Northking Information and Hangzhou Gisway

Can any of the company-specific risk be diversified away by investing in both Northking Information and Hangzhou Gisway 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 Northking Information and Hangzhou Gisway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northking Information Technology and Hangzhou Gisway Information, you can compare the effects of market volatilities on Northking Information and Hangzhou Gisway 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 Northking Information with a short position of Hangzhou Gisway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northking Information and Hangzhou Gisway.

Diversification Opportunities for Northking Information and Hangzhou Gisway

0.9

Correlation Coefficient

Northking Information  Hangzhou Gisway

Almost no diversification

The 3 months correlation between Northking and Hangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Northking Information Technolo and Hangzhou Gisway Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gisway Info and Northking Information 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 Northking Information Technology are associated (or correlated) with Hangzhou Gisway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gisway Info has no effect on the direction of Northking Information i.e., Northking Information and Hangzhou Gisway go up and down completely randomly.

Pair Corralation between Northking Information and Hangzhou Gisway

Assuming the 90 days trading horizon Northking Information Technology is expected to generate 1.18 times more return on investment than Hangzhou Gisway. However, Northking Information is 1.18 times more volatile than Hangzhou Gisway Information. It trades about 0.2 of its potential returns per unit of risk. Hangzhou Gisway Information is currently generating about 0.16 per unit of risk. If you would invest  1,039  in Northking Information Technology on September 15, 2024 and sell it today you would earn a total of  556.00  from holding Northking Information Technology or generate 53.51% return on investment over 90 days.

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

Northking Information Technolo  vs.  Hangzhou Gisway Information

Northking Information

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Northking Information Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Northking Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Hangzhou Gisway Info

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Gisway Information are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hangzhou Gisway sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Northking Information and Hangzhou Gisway

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

The idea behind Northking Information Technology and Hangzhou Gisway Information 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.