Correlation Between Northern United and Dazhong Transportation
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By analyzing existing cross correlation between Northern United Publishing and Dazhong Transportation Group, you can compare the effects of market volatilities on Northern United and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Dazhong Transportation.
Diversification Opportunities for Northern United and Dazhong Transportation
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and Dazhong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Northern United i.e., Northern United and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Northern United and Dazhong Transportation
Assuming the 90 days trading horizon Northern United Publishing is expected to generate 1.2 times more return on investment than Dazhong Transportation. However, Northern United is 1.2 times more volatile than Dazhong Transportation Group. It trades about -0.01 of its potential returns per unit of risk. Dazhong Transportation Group is currently generating about -0.04 per unit of risk. If you would invest 643.00 in Northern United Publishing on October 25, 2024 and sell it today you would lose (25.00) from holding Northern United Publishing or give up 3.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Northern United Publishing vs. Dazhong Transportation Group
Performance |
Timeline |
Northern United Publ |
Dazhong Transportation |
Northern United and Dazhong Transportation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern United and Dazhong Transportation
The main advantage of trading using opposite Northern United and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.Northern United vs. Xiamen Jihong Package | Northern United vs. Great Sun Foods Co | Northern United vs. CGN Nuclear Technology | Northern United vs. Shanghai Ziyan Foods |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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