Correlation Between Northking Information and China State
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By analyzing existing cross correlation between Northking Information Technology and China State Construction, you can compare the effects of market volatilities on Northking Information and China State 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 China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northking Information and China State.
Diversification Opportunities for Northking Information and China State
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northking and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Northking Information Technolo and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction 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 China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Northking Information i.e., Northking Information and China State go up and down completely randomly.
Pair Corralation between Northking Information and China State
Assuming the 90 days trading horizon Northking Information Technology is expected to generate 1.73 times more return on investment than China State. However, Northking Information is 1.73 times more volatile than China State Construction. It trades about 0.06 of its potential returns per unit of risk. China State Construction is currently generating about -0.01 per unit of risk. If you would invest 1,553 in Northking Information Technology on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Northking Information Technology or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northking Information Technolo vs. China State Construction
Performance |
| Timeline |
| Northking Information |
| China State Construction |
Northking Information and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northking Information and China State
The main advantage of trading using opposite Northking Information and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northking Information position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Northking Information vs. China Petroleum Chemical | Northking Information vs. PetroChina Co Ltd | Northking Information vs. China State Construction | Northking Information vs. China Railway Group |
| China State vs. Hunan Investment Group | China State vs. Huaibei Mining Holdings | China State vs. Metro Investment Development | China State vs. Postal Savings Bank |
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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