Correlation Between Hubeiyichang Transportation and Nanjing Medlander
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Nanjing Medlander Medical, you can compare the effects of market volatilities on Hubeiyichang Transportation and Nanjing Medlander 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 Nanjing Medlander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Nanjing Medlander.
Diversification Opportunities for Hubeiyichang Transportation and Nanjing Medlander
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubeiyichang and Nanjing is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Nanjing Medlander Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Medlander Medical 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 Nanjing Medlander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Medlander Medical has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Nanjing Medlander go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Nanjing Medlander
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.57 times more return on investment than Nanjing Medlander. However, Hubeiyichang Transportation Group is 1.75 times less risky than Nanjing Medlander. It trades about 0.19 of its potential returns per unit of risk. Nanjing Medlander Medical is currently generating about -0.09 per unit of risk. If you would invest 527.00 in Hubeiyichang Transportation Group on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Hubeiyichang Transportation Group or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Nanjing Medlander Medical
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Nanjing Medlander Medical |
Hubeiyichang Transportation and Nanjing Medlander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Nanjing Medlander
The main advantage of trading using opposite Hubeiyichang Transportation and Nanjing Medlander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Nanjing Medlander 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 Medlander will offset losses from the drop in Nanjing Medlander's long position.The idea behind Hubeiyichang Transportation Group and Nanjing Medlander Medical 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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