Correlation Between Hunan Nanling and New China
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By analyzing existing cross correlation between Hunan Nanling Industrial and New China Life, you can compare the effects of market volatilities on Hunan Nanling and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Nanling and New China.
Diversification Opportunities for Hunan Nanling and New China
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and New is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Nanling Industrial and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Hunan Nanling i.e., Hunan Nanling and New China go up and down completely randomly.
Pair Corralation between Hunan Nanling and New China
Assuming the 90 days trading horizon Hunan Nanling Industrial is expected to under-perform the New China. But the stock apears to be less risky and, when comparing its historical volatility, Hunan Nanling Industrial is 1.06 times less risky than New China. The stock trades about -0.01 of its potential returns per unit of risk. The New China Life is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,932 in New China Life on October 30, 2024 and sell it today you would earn a total of 1,831 from holding New China Life or generate 62.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Nanling Industrial vs. New China Life
Performance |
| Timeline |
| Hunan Nanling Industrial |
| New China Life |
Hunan Nanling and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Nanling and New China
The main advantage of trading using opposite Hunan Nanling and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Nanling position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Hunan Nanling vs. Zijin Mining Group | Hunan Nanling vs. Wanhua Chemical Group | Hunan Nanling vs. Baoshan Iron Steel | Hunan Nanling vs. Shandong Gold Mining |
| New China vs. Citic Offshore Helicopter | New China vs. Northern United Publishing | New China vs. Tibet Huayu Mining | New China vs. Xinjiang Baodi Mining |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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