Correlation Between Changchun High and Fujian Nanwang
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By analyzing existing cross correlation between Changchun High New and Fujian Nanwang Environment, you can compare the effects of market volatilities on Changchun High and Fujian Nanwang 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 Changchun High with a short position of Fujian Nanwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun High and Fujian Nanwang.
Diversification Opportunities for Changchun High and Fujian Nanwang
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Changchun and Fujian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Changchun High New and Fujian Nanwang Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Nanwang Envir and Changchun High 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 Changchun High New are associated (or correlated) with Fujian Nanwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Nanwang Envir has no effect on the direction of Changchun High i.e., Changchun High and Fujian Nanwang go up and down completely randomly.
Pair Corralation between Changchun High and Fujian Nanwang
Assuming the 90 days trading horizon Changchun High New is expected to generate 0.4 times more return on investment than Fujian Nanwang. However, Changchun High New is 2.48 times less risky than Fujian Nanwang. It trades about -0.36 of its potential returns per unit of risk. Fujian Nanwang Environment is currently generating about -0.24 per unit of risk. If you would invest 10,181 in Changchun High New on October 29, 2024 and sell it today you would lose (869.00) from holding Changchun High New or give up 8.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Changchun High New vs. Fujian Nanwang Environment
Performance |
Timeline |
Changchun High New |
Fujian Nanwang Envir |
Changchun High and Fujian Nanwang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changchun High and Fujian Nanwang
The main advantage of trading using opposite Changchun High and Fujian Nanwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun High position performs unexpectedly, Fujian Nanwang 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 Fujian Nanwang will offset losses from the drop in Fujian Nanwang's long position.Changchun High vs. China Minmetals Rare | Changchun High vs. Shengda Mining Co | Changchun High vs. Pengxin International Mining | Changchun High vs. Chengtun Mining Group |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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