Correlation Between Sunwave Communications and Northking Information
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By analyzing existing cross correlation between Sunwave Communications Co and Northking Information Technology, you can compare the effects of market volatilities on Sunwave Communications and Northking Information 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 Sunwave Communications with a short position of Northking Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Northking Information.
Diversification Opportunities for Sunwave Communications and Northking Information
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunwave and Northking is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Northking Information Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northking Information and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with Northking Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northking Information has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Northking Information go up and down completely randomly.
Pair Corralation between Sunwave Communications and Northking Information
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 1.11 times more return on investment than Northking Information. However, Sunwave Communications is 1.11 times more volatile than Northking Information Technology. It trades about 0.06 of its potential returns per unit of risk. Northking Information Technology is currently generating about 0.03 per unit of risk. If you would invest 448.00 in Sunwave Communications Co on September 13, 2024 and sell it today you would earn a total of 447.00 from holding Sunwave Communications Co or generate 99.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. Northking Information Technolo
Performance |
| Timeline |
| Sunwave Communications |
| Northking Information |
Sunwave Communications and Northking Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Northking Information
The main advantage of trading using opposite Sunwave Communications and Northking Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Northking Information 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 Northking Information will offset losses from the drop in Northking Information's long position.| Sunwave Communications vs. Guangdong Wens Foodstuff | Sunwave Communications vs. HaiXin Foods Co | Sunwave Communications vs. Jiangsu Yueda Investment | Sunwave Communications vs. Eastroc Beverage Group |
| Northking Information vs. China Petroleum Chemical | Northking Information vs. PetroChina Co Ltd | Northking Information vs. China State Construction | Northking Information vs. China Railway Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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