Correlation Between Nanjing Putian and Shandong Huifa
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Shandong Huifa Foodstuff, you can compare the effects of market volatilities on Nanjing Putian and Shandong Huifa 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 Shandong Huifa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Shandong Huifa.
Diversification Opportunities for Nanjing Putian and Shandong Huifa
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanjing and Shandong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Shandong Huifa Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Huifa Foodstuff 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 Shandong Huifa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Huifa Foodstuff has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Shandong Huifa go up and down completely randomly.
Pair Corralation between Nanjing Putian and Shandong Huifa
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.05 times more return on investment than Shandong Huifa. However, Nanjing Putian is 1.05 times more volatile than Shandong Huifa Foodstuff. It trades about 0.33 of its potential returns per unit of risk. Shandong Huifa Foodstuff is currently generating about 0.29 per unit of risk. If you would invest 192.00 in Nanjing Putian Telecommunications on September 13, 2024 and sell it today you would earn a total of 244.00 from holding Nanjing Putian Telecommunications or generate 127.08% 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. Shandong Huifa Foodstuff
Performance |
Timeline |
Nanjing Putian Telec |
Shandong Huifa Foodstuff |
Nanjing Putian and Shandong Huifa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanjing Putian and Shandong Huifa
The main advantage of trading using opposite Nanjing Putian and Shandong Huifa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Shandong Huifa 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 Shandong Huifa will offset losses from the drop in Shandong Huifa's long position.Nanjing Putian vs. Industrial and Commercial | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Bank of China | Nanjing Putian vs. Agricultural Bank of |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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