Correlation Between Northking Information and Bank of Changsha
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By analyzing existing cross correlation between Northking Information Technology and Bank of Changsha, you can compare the effects of market volatilities on Northking Information and Bank of Changsha 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 Northking Information with a short position of Bank of Changsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northking Information and Bank of Changsha.
Diversification Opportunities for Northking Information and Bank of Changsha
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northking and Bank is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Northking Information Technolo and Bank of Changsha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Changsha and Northking Information 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 Northking Information Technology are associated (or correlated) with Bank of Changsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Changsha has no effect on the direction of Northking Information i.e., Northking Information and Bank of Changsha go up and down completely randomly.
Pair Corralation between Northking Information and Bank of Changsha
Assuming the 90 days trading horizon Northking Information Technology is expected to under-perform the Bank of Changsha. In addition to that, Northking Information is 1.85 times more volatile than Bank of Changsha. It trades about -0.17 of its total potential returns per unit of risk. Bank of Changsha is currently generating about -0.03 per unit of volatility. If you would invest 862.00 in Bank of Changsha on October 20, 2024 and sell it today you would lose (10.00) from holding Bank of Changsha or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northking Information Technolo vs. Bank of Changsha
Performance |
| Timeline |
| Northking Information |
| Bank of Changsha |
Northking Information and Bank of Changsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northking Information and Bank of Changsha
The main advantage of trading using opposite Northking Information and Bank of Changsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northking Information position performs unexpectedly, Bank of Changsha 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 Bank of Changsha will offset losses from the drop in Bank of Changsha's long position.The idea behind Northking Information Technology and Bank of Changsha 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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