Correlation Between Hubeiyichang Transportation and NAURA Technology
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and NAURA Technology Group, you can compare the effects of market volatilities on Hubeiyichang Transportation and NAURA Technology 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 Hubeiyichang Transportation with a short position of NAURA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and NAURA Technology.
Diversification Opportunities for Hubeiyichang Transportation and NAURA Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubeiyichang and NAURA is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and NAURA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAURA Technology and Hubeiyichang Transportation 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 Hubeiyichang Transportation Group are associated (or correlated) with NAURA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAURA Technology has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and NAURA Technology go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and NAURA Technology
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to under-perform the NAURA Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hubeiyichang Transportation Group is 1.5 times less risky than NAURA Technology. The stock trades about -0.01 of its potential returns per unit of risk. The NAURA Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 24,315 in NAURA Technology Group on October 14, 2024 and sell it today you would earn a total of 14,050 from holding NAURA Technology Group or generate 57.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. NAURA Technology Group
Performance |
| Timeline |
| Hubeiyichang Transportation |
| NAURA Technology |
Hubeiyichang Transportation and NAURA Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and NAURA Technology
The main advantage of trading using opposite Hubeiyichang Transportation and NAURA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, NAURA Technology 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 NAURA Technology will offset losses from the drop in NAURA Technology's long position.The idea behind Hubeiyichang Transportation Group and NAURA Technology Group 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.
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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