Correlation Between Hunan Nanling and Changchun Faway
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By analyzing existing cross correlation between Hunan Nanling Industrial and Changchun Faway Automobile, you can compare the effects of market volatilities on Hunan Nanling and Changchun Faway 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 Nanling with a short position of Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Nanling and Changchun Faway.
Diversification Opportunities for Hunan Nanling and Changchun Faway
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Changchun is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Nanling Industrial and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto and Hunan Nanling 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 Nanling Industrial are associated (or correlated) with Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Hunan Nanling i.e., Hunan Nanling and Changchun Faway go up and down completely randomly.
Pair Corralation between Hunan Nanling and Changchun Faway
Assuming the 90 days trading horizon Hunan Nanling is expected to generate 27.11 times less return on investment than Changchun Faway. In addition to that, Hunan Nanling is 1.28 times more volatile than Changchun Faway Automobile. It trades about 0.0 of its total potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.07 per unit of volatility. If you would invest 835.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would earn a total of 133.00 from holding Changchun Faway Automobile or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Nanling Industrial vs. Changchun Faway Automobile
Performance |
| Timeline |
| Hunan Nanling Industrial |
| Changchun Faway Auto |
Hunan Nanling and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Nanling and Changchun Faway
The main advantage of trading using opposite Hunan Nanling and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Nanling position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Hunan Nanling vs. Bomin Electronics Co | Hunan Nanling vs. Aurora Optoelectronics Co | Hunan Nanling vs. TongFu Microelectronics Co | Hunan Nanling vs. Wuhan Yangtze Communication |
| Changchun Faway vs. Chinese Universe Publishing | Changchun Faway vs. Ningbo Jianan Electronics | Changchun Faway vs. Epoxy Base Electronic | Changchun Faway vs. Changjiang Publishing Media |
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 CEOs Directory module to screen CEOs from public companies around the world.
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