Correlation Between China Securities and Nanning Chemical
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By analyzing existing cross correlation between China Securities 800 and Nanning Chemical Industry, you can compare the effects of market volatilities on China Securities and Nanning Chemical 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 China Securities with a short position of Nanning Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Nanning Chemical.
Diversification Opportunities for China Securities and Nanning Chemical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Nanning is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Nanning Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanning Chemical Industry and China Securities 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 China Securities 800 are associated (or correlated) with Nanning Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanning Chemical Industry has no effect on the direction of China Securities i.e., China Securities and Nanning Chemical go up and down completely randomly.
Pair Corralation between China Securities and Nanning Chemical
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.61 times more return on investment than Nanning Chemical. However, China Securities 800 is 1.64 times less risky than Nanning Chemical. It trades about -0.29 of its potential returns per unit of risk. Nanning Chemical Industry is currently generating about -0.31 per unit of risk. If you would invest 432,984 in China Securities 800 on October 12, 2024 and sell it today you would lose (27,815) from holding China Securities 800 or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Nanning Chemical Industry
Performance |
| Timeline |
China Securities and Nanning Chemical Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Nanning Chemical Industry
Pair trading matchups for Nanning Chemical
Pair Trading with China Securities and Nanning Chemical
The main advantage of trading using opposite China Securities and Nanning Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Nanning Chemical 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 Nanning Chemical will offset losses from the drop in Nanning Chemical's long position.| China Securities vs. Huatian Hotel Group | China Securities vs. Keeson Technology Corp | China Securities vs. Jiujiang Shanshui Technology | China Securities vs. Smartgiant Technology Co |
| Nanning Chemical vs. Chengdu Xinzhu RoadBridge | Nanning Chemical vs. Shanghai Newtouch Software | Nanning Chemical vs. Anhui Transport Consulting | Nanning Chemical vs. Hainan Haiqi Transportation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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