Correlation Between Northern United and Chahua Modern
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By analyzing existing cross correlation between Northern United Publishing and Chahua Modern Housewares, you can compare the effects of market volatilities on Northern United and Chahua Modern 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 Northern United with a short position of Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Chahua Modern.
Diversification Opportunities for Northern United and Chahua Modern
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northern and Chahua is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares and Northern United 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 Northern United Publishing are associated (or correlated) with Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Northern United i.e., Northern United and Chahua Modern go up and down completely randomly.
Pair Corralation between Northern United and Chahua Modern
Assuming the 90 days trading horizon Northern United Publishing is expected to under-perform the Chahua Modern. But the stock apears to be less risky and, when comparing its historical volatility, Northern United Publishing is 1.23 times less risky than Chahua Modern. The stock trades about -0.3 of its potential returns per unit of risk. The Chahua Modern Housewares is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,014 in Chahua Modern Housewares on October 12, 2024 and sell it today you would earn a total of 74.00 from holding Chahua Modern Housewares or generate 3.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Northern United Publishing vs. Chahua Modern Housewares
Performance |
Timeline |
Northern United Publ |
Chahua Modern Housewares |
Northern United and Chahua Modern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern United and Chahua Modern
The main advantage of trading using opposite Northern United and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.Northern United vs. Jointo Energy Investment | Northern United vs. Xiamen Bank Co | Northern United vs. Hunan Investment Group | Northern United vs. Xiandai Investment Co |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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