Correlation Between Nanjing Putian and Shenzhen Centralcon
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Nanjing Putian and Shenzhen Centralcon 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 Nanjing Putian with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Shenzhen Centralcon.
Diversification Opportunities for Nanjing Putian and Shenzhen Centralcon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Shenzhen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Nanjing Putian 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 Nanjing Putian Telecommunications are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Nanjing Putian and Shenzhen Centralcon
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.92 times more return on investment than Shenzhen Centralcon. However, Nanjing Putian is 1.92 times more volatile than Shenzhen Centralcon Investment. It trades about 0.14 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.15 per unit of risk. If you would invest 388.00 in Nanjing Putian Telecommunications on September 5, 2024 and sell it today you would earn a total of 49.00 from holding Nanjing Putian Telecommunications or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Nanjing Putian Telec |
| Shenzhen Centralcon |
Nanjing Putian and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Shenzhen Centralcon
The main advantage of trading using opposite Nanjing Putian and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.| Nanjing Putian vs. Industrial and Commercial | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Bank of China | Nanjing Putian vs. Agricultural Bank of |
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