Correlation Between New Hope and Dr Peng
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By analyzing existing cross correlation between New Hope Dairy and Dr Peng Telecom, you can compare the effects of market volatilities on New Hope and Dr Peng 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 New Hope with a short position of Dr Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Dr Peng.
Diversification Opportunities for New Hope and Dr Peng
Weak diversification
The 3 months correlation between New and 600804 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Dr Peng Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Peng Telecom and New Hope 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 New Hope Dairy are associated (or correlated) with Dr Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Peng Telecom has no effect on the direction of New Hope i.e., New Hope and Dr Peng go up and down completely randomly.
Pair Corralation between New Hope and Dr Peng
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.81 times more return on investment than Dr Peng. However, New Hope Dairy is 1.24 times less risky than Dr Peng. It trades about 0.16 of its potential returns per unit of risk. Dr Peng Telecom is currently generating about 0.08 per unit of risk. If you would invest 855.00 in New Hope Dairy on November 7, 2024 and sell it today you would earn a total of 592.00 from holding New Hope Dairy or generate 69.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Dr Peng Telecom
Performance |
| Timeline |
| New Hope Dairy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Dr Peng Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
New Hope and Dr Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Dr Peng
The main advantage of trading using opposite New Hope and Dr Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Dr Peng 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 Dr Peng will offset losses from the drop in Dr Peng's long position.The idea behind New Hope Dairy and Dr Peng Telecom 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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