Correlation Between Industrial and Nanjing Canatal

Can any of the company-specific risk be diversified away by investing in both Industrial and Nanjing Canatal 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 Industrial and Nanjing Canatal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Industrial and Commercial and Nanjing Canatal Data, you can compare the effects of market volatilities on Industrial and Nanjing Canatal 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 Industrial with a short position of Nanjing Canatal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Nanjing Canatal.

Diversification Opportunities for Industrial and Nanjing Canatal

0.32

Correlation Coefficient

Industrial  Nanjing Canatal

Weak diversification

The 3 months correlation between Industrial and Nanjing is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Nanjing Canatal Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Canatal Data and Industrial 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 Industrial and Commercial are associated (or correlated) with Nanjing Canatal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Canatal Data has no effect on the direction of Industrial i.e., Industrial and Nanjing Canatal go up and down completely randomly.

Pair Corralation between Industrial and Nanjing Canatal

Assuming the 90 days trading horizon Industrial and Commercial is expected to under-perform the Nanjing Canatal. But the stock apears to be less risky and, when comparing its historical volatility, Industrial and Commercial is 3.62 times less risky than Nanjing Canatal. The stock trades about -0.01 of its potential returns per unit of risk. The Nanjing Canatal Data is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  872.00  in Nanjing Canatal Data on December 26, 2024 and sell it today you would earn a total of  71.00  from holding Nanjing Canatal Data or generate 8.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Industrial and Commercial  vs.  Nanjing Canatal Data

Industrial and Commercial

Risk-Adjusted Performance

Very Weak

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

Nanjing Canatal Data

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nanjing Canatal Data are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nanjing Canatal sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industrial and Nanjing Canatal

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

The idea behind Industrial and Commercial and Nanjing Canatal Data 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.