Correlation Between Nanjing Canatal and AVIC UAS

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Can any of the company-specific risk be diversified away by investing in both Nanjing Canatal and AVIC UAS 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 Nanjing Canatal and AVIC UAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanjing Canatal Data and AVIC UAS Co, you can compare the effects of market volatilities on Nanjing Canatal and AVIC UAS 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 Nanjing Canatal with a short position of AVIC UAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Canatal and AVIC UAS.

Diversification Opportunities for Nanjing Canatal and AVIC UAS

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Nanjing and AVIC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Canatal Data and AVIC UAS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIC UAS and Nanjing Canatal 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 Nanjing Canatal Data are associated (or correlated) with AVIC UAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIC UAS has no effect on the direction of Nanjing Canatal i.e., Nanjing Canatal and AVIC UAS go up and down completely randomly.

Pair Corralation between Nanjing Canatal and AVIC UAS

Assuming the 90 days trading horizon Nanjing Canatal Data is expected to generate 1.37 times more return on investment than AVIC UAS. However, Nanjing Canatal is 1.37 times more volatile than AVIC UAS Co. It trades about 0.08 of its potential returns per unit of risk. AVIC UAS Co is currently generating about -0.25 per unit of risk. If you would invest  707.00  in Nanjing Canatal Data on October 6, 2024 and sell it today you would earn a total of  90.00  from holding Nanjing Canatal Data or generate 12.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.73%
ValuesDaily Returns

Nanjing Canatal Data  vs.  AVIC UAS Co

 Performance 
       Timeline  
Nanjing Canatal Data 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Nanjing Canatal Data are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nanjing Canatal may actually be approaching a critical reversion point that can send shares even higher in February 2025.
AVIC UAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AVIC UAS Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nanjing Canatal and AVIC UAS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nanjing Canatal and AVIC UAS

The main advantage of trading using opposite Nanjing Canatal and AVIC UAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Canatal position performs unexpectedly, AVIC UAS 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 AVIC UAS will offset losses from the drop in AVIC UAS's long position.
The idea behind Nanjing Canatal Data and AVIC UAS Co 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.
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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