Correlation Between Panda Dairy and Renrenle Commercial
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By analyzing existing cross correlation between Panda Dairy Corp and Renrenle Commercial Group, you can compare the effects of market volatilities on Panda Dairy and Renrenle Commercial 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 Panda Dairy with a short position of Renrenle Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Dairy and Renrenle Commercial.
Diversification Opportunities for Panda Dairy and Renrenle Commercial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Panda and Renrenle is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Panda Dairy Corp and Renrenle Commercial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renrenle Commercial and Panda Dairy 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 Panda Dairy Corp are associated (or correlated) with Renrenle Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renrenle Commercial has no effect on the direction of Panda Dairy i.e., Panda Dairy and Renrenle Commercial go up and down completely randomly.
Pair Corralation between Panda Dairy and Renrenle Commercial
Assuming the 90 days trading horizon Panda Dairy is expected to generate 2.77 times less return on investment than Renrenle Commercial. In addition to that, Panda Dairy is 1.98 times more volatile than Renrenle Commercial Group. It trades about 0.07 of its total potential returns per unit of risk. Renrenle Commercial Group is currently generating about 0.41 per unit of volatility. If you would invest 479.00 in Renrenle Commercial Group on October 3, 2024 and sell it today you would earn a total of 184.00 from holding Renrenle Commercial Group or generate 38.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Panda Dairy Corp vs. Renrenle Commercial Group
Performance |
Timeline |
Panda Dairy Corp |
Renrenle Commercial |
Panda Dairy and Renrenle Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Panda Dairy and Renrenle Commercial
The main advantage of trading using opposite Panda Dairy and Renrenle Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Dairy position performs unexpectedly, Renrenle Commercial 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 Renrenle Commercial will offset losses from the drop in Renrenle Commercial's long position.Panda Dairy vs. China State Construction | Panda Dairy vs. Poly Real Estate | Panda Dairy vs. China Vanke Co | Panda Dairy vs. China Merchants Shekou |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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