Correlation Between Northern Graphite and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Northern Graphite and ZhongAn Online at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Northern Graphite and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Graphite and ZhongAn Online P, you can compare the effects of market volatilities on Northern Graphite and ZhongAn Online 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 Northern Graphite with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Graphite and ZhongAn Online.
Diversification Opportunities for Northern Graphite and ZhongAn Online
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northern and ZhongAn is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Northern Graphite and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and Northern Graphite 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 Northern Graphite are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Northern Graphite i.e., Northern Graphite and ZhongAn Online go up and down completely randomly.
Pair Corralation between Northern Graphite and ZhongAn Online
Assuming the 90 days horizon Northern Graphite is expected to generate 3.8 times more return on investment than ZhongAn Online. However, Northern Graphite is 3.8 times more volatile than ZhongAn Online P. It trades about -0.11 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.57 per unit of risk. If you would invest 11.00 in Northern Graphite on October 9, 2024 and sell it today you would lose (2.08) from holding Northern Graphite or give up 18.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Graphite vs. ZhongAn Online P
Performance |
| Timeline |
| Northern Graphite |
| ZhongAn Online P |
Northern Graphite and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Graphite and ZhongAn Online
The main advantage of trading using opposite Northern Graphite and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Graphite position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Northern Graphite vs. Wyndham Hotels Resorts | Northern Graphite vs. InterContinental Hotels Group | Northern Graphite vs. DALATA HOTEL | Northern Graphite vs. Summit Hotel Properties |
| ZhongAn Online vs. Solstad Offshore ASA | ZhongAn Online vs. SIEM OFFSHORE NEW | ZhongAn Online vs. Martin Marietta Materials | ZhongAn Online vs. Vulcan Materials |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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