Correlation Between NAURA Technology and Hainan Drinda
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By analyzing existing cross correlation between NAURA Technology Group and Hainan Drinda Automotive, you can compare the effects of market volatilities on NAURA Technology and Hainan Drinda 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 NAURA Technology with a short position of Hainan Drinda. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAURA Technology and Hainan Drinda.
Diversification Opportunities for NAURA Technology and Hainan Drinda
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NAURA and Hainan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NAURA Technology Group and Hainan Drinda Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Drinda Automotive and NAURA Technology 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 NAURA Technology Group are associated (or correlated) with Hainan Drinda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Drinda Automotive has no effect on the direction of NAURA Technology i.e., NAURA Technology and Hainan Drinda go up and down completely randomly.
Pair Corralation between NAURA Technology and Hainan Drinda
Assuming the 90 days trading horizon NAURA Technology Group is expected to generate 0.66 times more return on investment than Hainan Drinda. However, NAURA Technology Group is 1.52 times less risky than Hainan Drinda. It trades about 0.06 of its potential returns per unit of risk. Hainan Drinda Automotive is currently generating about -0.01 per unit of risk. If you would invest 24,133 in NAURA Technology Group on September 4, 2024 and sell it today you would earn a total of 18,066 from holding NAURA Technology Group or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAURA Technology Group vs. Hainan Drinda Automotive
Performance |
| Timeline |
| NAURA Technology |
| Hainan Drinda Automotive |
NAURA Technology and Hainan Drinda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAURA Technology and Hainan Drinda
The main advantage of trading using opposite NAURA Technology and Hainan Drinda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAURA Technology position performs unexpectedly, Hainan Drinda 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 Hainan Drinda will offset losses from the drop in Hainan Drinda's long position.| NAURA Technology vs. China Railway Construction | NAURA Technology vs. Tengda Construction Group | NAURA Technology vs. Xinke Material | NAURA Technology vs. Anhui Huilong Agricultural |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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