Correlation Between Nanjing Putian and Chongqing Road
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Chongqing Road Bridge, you can compare the effects of market volatilities on Nanjing Putian and Chongqing Road 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 Nanjing Putian with a short position of Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Chongqing Road.
Diversification Opportunities for Nanjing Putian and Chongqing Road
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanjing and Chongqing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge and Nanjing Putian 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 Nanjing Putian Telecommunications are associated (or correlated) with Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Chongqing Road go up and down completely randomly.
Pair Corralation between Nanjing Putian and Chongqing Road
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.04 times more return on investment than Chongqing Road. However, Nanjing Putian is 1.04 times more volatile than Chongqing Road Bridge. It trades about 0.14 of its potential returns per unit of risk. Chongqing Road Bridge is currently generating about 0.02 per unit of risk. If you would invest 260.00 in Nanjing Putian Telecommunications on October 5, 2024 and sell it today you would earn a total of 103.00 from holding Nanjing Putian Telecommunications or generate 39.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Chongqing Road Bridge
Performance |
Timeline |
Nanjing Putian Telec |
Chongqing Road Bridge |
Nanjing Putian and Chongqing Road Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanjing Putian and Chongqing Road
The main advantage of trading using opposite Nanjing Putian and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.Nanjing Putian vs. New Hope Dairy | Nanjing Putian vs. Changjiang Publishing Media | Nanjing Putian vs. Time Publishing and | Nanjing Putian vs. Shandong Publishing Media |
Chongqing Road vs. Industrial and Commercial | Chongqing Road vs. China Construction Bank | Chongqing Road vs. Agricultural Bank of | Chongqing Road vs. Bank of China |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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