Correlation Between Kuang Chi and Nanjing Putian
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By analyzing existing cross correlation between Kuang Chi Technologies and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Kuang Chi 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 Kuang Chi with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Nanjing Putian.
Diversification Opportunities for Kuang Chi and Nanjing Putian
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kuang and Nanjing is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies 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 Kuang Chi 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 Kuang Chi Technologies 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 Kuang Chi i.e., Kuang Chi and Nanjing Putian go up and down completely randomly.
Pair Corralation between Kuang Chi and Nanjing Putian
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to generate 0.89 times more return on investment than Nanjing Putian. However, Kuang Chi Technologies is 1.12 times less risky than Nanjing Putian. It trades about 0.0 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about -0.03 per unit of risk. If you would invest 4,149 in Kuang Chi Technologies on November 7, 2024 and sell it today you would lose (84.00) from holding Kuang Chi Technologies or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Kuang Chi Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nanjing Putian Telec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Kuang Chi and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Nanjing Putian
The main advantage of trading using opposite Kuang Chi and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi 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.The idea behind Kuang Chi Technologies and Nanjing Putian Telecommunications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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