Correlation Between Nanhua Bio and Metro Investment
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By analyzing existing cross correlation between Nanhua Bio Medicine and Metro Investment Development, you can compare the effects of market volatilities on Nanhua Bio and Metro 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 Nanhua Bio with a short position of Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Metro Investment.
Diversification Opportunities for Nanhua Bio and Metro Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanhua and Metro is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Metro Investment go up and down completely randomly.
Pair Corralation between Nanhua Bio and Metro Investment
Assuming the 90 days trading horizon Nanhua Bio is expected to generate 3.15 times less return on investment than Metro Investment. But when comparing it to its historical volatility, Nanhua Bio Medicine is 1.03 times less risky than Metro Investment. It trades about 0.0 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Metro Investment Development on September 2, 2024 and sell it today you would lose (44.00) from holding Metro Investment Development or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Metro Investment Development
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Metro Investment Dev |
Nanhua Bio and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Metro Investment
The main advantage of trading using opposite Nanhua Bio and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Metro 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 Metro Investment will offset losses from the drop in Metro Investment's long position.| Nanhua Bio vs. Guilin Seamild Foods | Nanhua Bio vs. Xiamen Bank Co | Nanhua Bio vs. HaiXin Foods Co | Nanhua Bio vs. Unisplendour Corp |
| Metro Investment vs. Guangzhou Tinci Materials | Metro Investment vs. Suzhou Xingye Material | Metro Investment vs. King Strong New Material | Metro Investment vs. Jiajia Food Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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