Correlation Between Nanhua Bio and Nanjing Xinjiekou
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By analyzing existing cross correlation between Nanhua Bio Medicine and Nanjing Xinjiekou Department, you can compare the effects of market volatilities on Nanhua Bio and Nanjing Xinjiekou 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 Nanhua Bio with a short position of Nanjing Xinjiekou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Nanjing Xinjiekou.
Diversification Opportunities for Nanhua Bio and Nanjing Xinjiekou
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanhua and Nanjing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Nanjing Xinjiekou Department in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Xinjiekou and Nanhua Bio 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 Nanhua Bio Medicine are associated (or correlated) with Nanjing Xinjiekou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Xinjiekou has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Nanjing Xinjiekou go up and down completely randomly.
Pair Corralation between Nanhua Bio and Nanjing Xinjiekou
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to generate 1.47 times more return on investment than Nanjing Xinjiekou. However, Nanhua Bio is 1.47 times more volatile than Nanjing Xinjiekou Department. It trades about 0.0 of its potential returns per unit of risk. Nanjing Xinjiekou Department is currently generating about -0.01 per unit of risk. If you would invest 1,261 in Nanhua Bio Medicine on August 29, 2024 and sell it today you would lose (236.00) from holding Nanhua Bio Medicine or give up 18.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Nanjing Xinjiekou Department
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Nanjing Xinjiekou |
Nanhua Bio and Nanjing Xinjiekou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Nanjing Xinjiekou
The main advantage of trading using opposite Nanhua Bio and Nanjing Xinjiekou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Nanjing Xinjiekou 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 Xinjiekou will offset losses from the drop in Nanjing Xinjiekou's long position.| Nanhua Bio vs. China State Construction | Nanhua Bio vs. Huafa Industrial Co | Nanhua Bio vs. China International Capital | Nanhua Bio vs. Kweichow Moutai Co |
| Nanjing Xinjiekou vs. Peoples Insurance of | Nanjing Xinjiekou vs. Nanjing Putian Telecommunications | Nanjing Xinjiekou vs. Allwin Telecommunication Co | Nanjing Xinjiekou vs. Jilin Jlu Communication |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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