Correlation Between Grand Pacific and Nan Pao
Can any of the company-specific risk be diversified away by investing in both Grand Pacific and Nan Pao 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 Grand Pacific and Nan Pao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Pacific Petrochemical and Nan Pao Resins, you can compare the effects of market volatilities on Grand Pacific and Nan Pao 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 Grand Pacific with a short position of Nan Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Pacific and Nan Pao.
Diversification Opportunities for Grand Pacific and Nan Pao
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grand and Nan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grand Pacific Petrochemical and Nan Pao Resins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Pao Resins and Grand Pacific 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 Grand Pacific Petrochemical are associated (or correlated) with Nan Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Pao Resins has no effect on the direction of Grand Pacific i.e., Grand Pacific and Nan Pao go up and down completely randomly.
Pair Corralation between Grand Pacific and Nan Pao
Assuming the 90 days trading horizon Grand Pacific Petrochemical is expected to under-perform the Nan Pao. But the stock apears to be less risky and, when comparing its historical volatility, Grand Pacific Petrochemical is 3.52 times less risky than Nan Pao. The stock trades about -0.06 of its potential returns per unit of risk. The Nan Pao Resins is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 29,050 in Nan Pao Resins on September 14, 2024 and sell it today you would earn a total of 2,500 from holding Nan Pao Resins or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Pacific Petrochemical vs. Nan Pao Resins
Performance |
| Timeline |
| Grand Pacific Petroc |
| Nan Pao Resins |
Grand Pacific and Nan Pao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Pacific and Nan Pao
The main advantage of trading using opposite Grand Pacific and Nan Pao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Pacific position performs unexpectedly, Nan Pao 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 Nan Pao will offset losses from the drop in Nan Pao's long position.| Grand Pacific vs. Formosa Plastics Corp | Grand Pacific vs. Formosa Chemicals Fibre | Grand Pacific vs. Shiny Chemical Industrial | Grand Pacific vs. China Steel Chemical |
| Nan Pao vs. Grand Pacific Petrochemical | Nan Pao vs. MedFirst Healthcare Services | Nan Pao vs. Namchow Chemical Industrial | Nan Pao vs. Johnson Health Tech |
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.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |