Correlation Between Hunan Investment and Nanjing Putian
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By analyzing existing cross correlation between Hunan Investment Group and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Hunan Investment and Nanjing Putian 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 Hunan Investment with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Nanjing Putian.
Diversification Opportunities for Hunan Investment and Nanjing Putian
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Nanjing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Hunan Investment i.e., Hunan Investment and Nanjing Putian go up and down completely randomly.
Pair Corralation between Hunan Investment and Nanjing Putian
Assuming the 90 days trading horizon Hunan Investment is expected to generate 6.13 times less return on investment than Nanjing Putian. But when comparing it to its historical volatility, Hunan Investment Group is 1.47 times less risky than Nanjing Putian. It trades about 0.02 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Nanjing Putian Telecommunications on September 2, 2024 and sell it today you would earn a total of 214.00 from holding Nanjing Putian Telecommunications or generate 86.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Hunan Investment |
| Nanjing Putian Telec |
Hunan Investment and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Nanjing Putian
The main advantage of trading using opposite Hunan Investment and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Nanjing Putian 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 Putian will offset losses from the drop in Nanjing Putian's long position.| Hunan Investment vs. Unisplendour Corp | Hunan Investment vs. Longjian Road Bridge | Hunan Investment vs. Xinjiang Beixin RoadBridge | Hunan Investment vs. Shandong Hi Speed RoadBridge |
| Nanjing Putian vs. Puyang Huicheng Electronic | Nanjing Putian vs. Jiangyin Jianghua Microelectronics | Nanjing Putian vs. Qumei Furniture Group | Nanjing Putian vs. Fiberhome Telecommunication Technologies |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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