Correlation Between Nantong Haixing and Hunan Investment
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By analyzing existing cross correlation between Nantong Haixing Electronics and Hunan Investment Group, you can compare the effects of market volatilities on Nantong Haixing and Hunan Investment 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 Nantong Haixing with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Haixing and Hunan Investment.
Diversification Opportunities for Nantong Haixing and Hunan Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nantong and Hunan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Haixing Electronics and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Nantong Haixing 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 Nantong Haixing Electronics are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Nantong Haixing i.e., Nantong Haixing and Hunan Investment go up and down completely randomly.
Pair Corralation between Nantong Haixing and Hunan Investment
Assuming the 90 days trading horizon Nantong Haixing is expected to generate 1.65 times less return on investment than Hunan Investment. But when comparing it to its historical volatility, Nantong Haixing Electronics is 1.55 times less risky than Hunan Investment. It trades about 0.03 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 508.00 in Hunan Investment Group on November 18, 2024 and sell it today you would earn a total of 16.00 from holding Hunan Investment Group or generate 3.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nantong Haixing Electronics vs. Hunan Investment Group
Performance |
Timeline |
Nantong Haixing Elec |
Hunan Investment |
Nantong Haixing and Hunan Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nantong Haixing and Hunan Investment
The main advantage of trading using opposite Nantong Haixing and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Haixing position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.Nantong Haixing vs. Super Dragon Engineering Plastics | ||
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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