Correlation Between Nanjing Putian and ZTE Corp
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and ZTE Corp, you can compare the effects of market volatilities on Nanjing Putian and ZTE Corp 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 ZTE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and ZTE Corp.
Diversification Opportunities for Nanjing Putian and ZTE Corp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and ZTE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and ZTE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corp 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 ZTE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corp has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and ZTE Corp go up and down completely randomly.
Pair Corralation between Nanjing Putian and ZTE Corp
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.39 times more return on investment than ZTE Corp. However, Nanjing Putian is 1.39 times more volatile than ZTE Corp. It trades about 0.05 of its potential returns per unit of risk. ZTE Corp is currently generating about 0.0 per unit of risk. If you would invest 285.00 in Nanjing Putian Telecommunications on August 27, 2024 and sell it today you would earn a total of 152.00 from holding Nanjing Putian Telecommunications or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. ZTE Corp
Performance |
| Timeline |
| Nanjing Putian Telec |
| ZTE Corp |
Nanjing Putian and ZTE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and ZTE Corp
The main advantage of trading using opposite Nanjing Putian and ZTE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, ZTE Corp 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 ZTE Corp will offset losses from the drop in ZTE Corp's long position.| Nanjing Putian vs. Shenzhen MYS Environmental | Nanjing Putian vs. AVIC Fund Management | Nanjing Putian vs. Shenzhen Bingchuan Network | Nanjing Putian vs. Penghua Shenzhen Energy |
| ZTE Corp vs. Shenzhen MYS Environmental | ZTE Corp vs. AVIC Fund Management | ZTE Corp vs. Shenzhen Bingchuan Network | ZTE Corp vs. Penghua Shenzhen Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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