Correlation Between Northking Information and Shanghai Putailai

Can any of the company-specific risk be diversified away by investing in both Northking Information and Shanghai Putailai 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 Shanghai Putailai 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 Shanghai Putailai New, you can compare the effects of market volatilities on Northking Information and Shanghai Putailai 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 Shanghai Putailai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northking Information and Shanghai Putailai.

Diversification Opportunities for Northking Information and Shanghai Putailai

0.0

Correlation Coefficient

Northking Information  Shanghai Putailai

Pay attention - limited upside

The 3 months correlation between Northking and Shanghai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northking Information Technolo and Shanghai Putailai New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Putailai New 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 Shanghai Putailai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Putailai New has no effect on the direction of Northking Information i.e., Northking Information and Shanghai Putailai go up and down completely randomly.

Pair Corralation between Northking Information and Shanghai Putailai

If you would invest  0.00  in Shanghai Putailai New on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Shanghai Putailai New or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Northking Information Technolo  vs.  Shanghai Putailai New

Northking Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northking Information Technology 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.

Shanghai Putailai New

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Northking Information and Shanghai Putailai

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

The idea behind Northking Information Technology and Shanghai Putailai New 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.