Correlation Between Telling Telecommunicatio and Nanhua Bio
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By analyzing existing cross correlation between Telling Telecommunication Holding and Nanhua Bio Medicine, you can compare the effects of market volatilities on Telling Telecommunicatio and Nanhua Bio 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 Telling Telecommunicatio with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telling Telecommunicatio and Nanhua Bio.
Diversification Opportunities for Telling Telecommunicatio and Nanhua Bio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telling and Nanhua is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Telling Telecommunication Hold and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Telling Telecommunicatio 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 Telling Telecommunication Holding are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Telling Telecommunicatio i.e., Telling Telecommunicatio and Nanhua Bio go up and down completely randomly.
Pair Corralation between Telling Telecommunicatio and Nanhua Bio
Assuming the 90 days trading horizon Telling Telecommunicatio is expected to generate 1.03 times less return on investment than Nanhua Bio. In addition to that, Telling Telecommunicatio is 1.35 times more volatile than Nanhua Bio Medicine. It trades about 0.07 of its total potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.1 per unit of volatility. If you would invest 697.00 in Nanhua Bio Medicine on October 18, 2024 and sell it today you would earn a total of 191.00 from holding Nanhua Bio Medicine or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telling Telecommunication Hold vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Telling Telecommunicatio |
| Nanhua Bio Medicine |
Telling Telecommunicatio and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telling Telecommunicatio and Nanhua Bio
The main advantage of trading using opposite Telling Telecommunicatio and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telling Telecommunicatio position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.The idea behind Telling Telecommunication Holding and Nanhua Bio Medicine 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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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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