Correlation Between Steadfast Group and Nanjing Panda

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Can any of the company-specific risk be diversified away by investing in both Steadfast Group and Nanjing Panda 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 Steadfast Group and Nanjing Panda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steadfast Group Limited and Nanjing Panda Electronics, you can compare the effects of market volatilities on Steadfast Group and Nanjing Panda 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 Steadfast Group with a short position of Nanjing Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steadfast Group and Nanjing Panda.

Diversification Opportunities for Steadfast Group and Nanjing Panda

SteadfastNanjingDiversified AwaySteadfastNanjingDiversified Away100%
-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Steadfast and Nanjing is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Steadfast Group Limited and Nanjing Panda Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Panda Electronics and Steadfast Group 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 Steadfast Group Limited are associated (or correlated) with Nanjing Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Panda Electronics has no effect on the direction of Steadfast Group i.e., Steadfast Group and Nanjing Panda go up and down completely randomly.

Pair Corralation between Steadfast Group and Nanjing Panda

Assuming the 90 days horizon Steadfast Group is expected to generate 1.7 times less return on investment than Nanjing Panda. But when comparing it to its historical volatility, Steadfast Group Limited is 1.6 times less risky than Nanjing Panda. It trades about 0.08 of its potential returns per unit of risk. Nanjing Panda Electronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Nanjing Panda Electronics on October 25, 2024 and sell it today you would earn a total of  3.00  from holding Nanjing Panda Electronics or generate 10.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.67%
ValuesDaily Returns

Steadfast Group Limited  vs.  Nanjing Panda Electronics

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.151S6 NNJ
       Timeline  
Steadfast Group 

Risk-Adjusted Performance

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Modest
Over the last 90 days Steadfast Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Steadfast Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Nanjing Panda Electronics 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nanjing Panda Electronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nanjing Panda may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.290.30.310.320.330.340.35

Steadfast Group and Nanjing Panda Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.54-3.4-2.26-1.120.0191.142.333.514.695.87 0.050.100.15
JavaScript chart by amCharts 3.21.151S6 NNJ
       Returns  

Pair Trading with Steadfast Group and Nanjing Panda

The main advantage of trading using opposite Steadfast Group and Nanjing Panda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steadfast Group position performs unexpectedly, Nanjing Panda 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 Nanjing Panda will offset losses from the drop in Nanjing Panda's long position.
The idea behind Steadfast Group Limited and Nanjing Panda Electronics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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