Correlation Between Inner Mongolia and Panda Financial
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By analyzing existing cross correlation between Inner Mongolia Dazhong and Panda Financial Holding, you can compare the effects of market volatilities on Inner Mongolia and Panda Financial 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 Inner Mongolia with a short position of Panda Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Panda Financial.
Diversification Opportunities for Inner Mongolia and Panda Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Panda is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia Dazhong and Panda Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Financial Holding and Inner Mongolia 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 Inner Mongolia Dazhong are associated (or correlated) with Panda Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Financial Holding has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Panda Financial go up and down completely randomly.
Pair Corralation between Inner Mongolia and Panda Financial
Assuming the 90 days trading horizon Inner Mongolia Dazhong is expected to generate 0.35 times more return on investment than Panda Financial. However, Inner Mongolia Dazhong is 2.83 times less risky than Panda Financial. It trades about -0.25 of its potential returns per unit of risk. Panda Financial Holding is currently generating about -0.15 per unit of risk. If you would invest 899.00 in Inner Mongolia Dazhong on October 22, 2024 and sell it today you would lose (59.00) from holding Inner Mongolia Dazhong or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia Dazhong vs. Panda Financial Holding
Performance |
| Timeline |
| Inner Mongolia Dazhong |
| Panda Financial Holding |
Inner Mongolia and Panda Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Panda Financial
The main advantage of trading using opposite Inner Mongolia and Panda Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Panda Financial 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 Panda Financial will offset losses from the drop in Panda Financial's long position.| Inner Mongolia vs. Panda Financial Holding | Inner Mongolia vs. Ningbo Tech Bank Co | Inner Mongolia vs. Shenwu Energy Saving | Inner Mongolia vs. Beijing Yanjing Brewery |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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