Correlation Between Yunnan Yuntou and Nanjing Putian
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By analyzing existing cross correlation between Yunnan Yuntou Ecology and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Yunnan Yuntou and Nanjing Putian 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 Yunnan Yuntou with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Yuntou and Nanjing Putian.
Diversification Opportunities for Yunnan Yuntou and Nanjing Putian
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yunnan and Nanjing is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Yuntou Ecology and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec and Yunnan Yuntou 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 Yunnan Yuntou Ecology are associated (or correlated) with Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Yunnan Yuntou i.e., Yunnan Yuntou and Nanjing Putian go up and down completely randomly.
Pair Corralation between Yunnan Yuntou and Nanjing Putian
Assuming the 90 days trading horizon Yunnan Yuntou is expected to generate 1.27 times less return on investment than Nanjing Putian. But when comparing it to its historical volatility, Yunnan Yuntou Ecology is 1.97 times less risky than Nanjing Putian. It trades about 0.18 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Nanjing Putian Telecommunications on August 29, 2024 and sell it today you would earn a total of 39.00 from holding Nanjing Putian Telecommunications or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Yuntou Ecology vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Yunnan Yuntou Ecology |
| Nanjing Putian Telec |
Yunnan Yuntou and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Yuntou and Nanjing Putian
The main advantage of trading using opposite Yunnan Yuntou and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Yuntou position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.| Yunnan Yuntou vs. Huafa Industrial Co | Yunnan Yuntou vs. Chengtun Mining Group | Yunnan Yuntou vs. Gansu Yasheng Industrial | Yunnan Yuntou vs. Rising Nonferrous Metals |
| Nanjing Putian vs. China State Construction | Nanjing Putian vs. Huafa Industrial Co | Nanjing Putian vs. China International Capital | Nanjing Putian vs. Kweichow Moutai Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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