Correlation Between Nanjing Putian and Zhejiang Weixing
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Zhejiang Weixing New, you can compare the effects of market volatilities on Nanjing Putian and Zhejiang Weixing 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 Zhejiang Weixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Zhejiang Weixing.
Diversification Opportunities for Nanjing Putian and Zhejiang Weixing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanjing and Zhejiang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Zhejiang Weixing New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Weixing New 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 Zhejiang Weixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Weixing New has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Zhejiang Weixing go up and down completely randomly.
Pair Corralation between Nanjing Putian and Zhejiang Weixing
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.49 times more return on investment than Zhejiang Weixing. However, Nanjing Putian is 1.49 times more volatile than Zhejiang Weixing New. It trades about 0.03 of its potential returns per unit of risk. Zhejiang Weixing New is currently generating about -0.03 per unit of risk. If you would invest 349.00 in Nanjing Putian Telecommunications on August 29, 2024 and sell it today you would earn a total of 108.00 from holding Nanjing Putian Telecommunications or generate 30.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Zhejiang Weixing New
Performance |
| Timeline |
| Nanjing Putian Telec |
| Zhejiang Weixing New |
Nanjing Putian and Zhejiang Weixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Zhejiang Weixing
The main advantage of trading using opposite Nanjing Putian and Zhejiang Weixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Zhejiang Weixing 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 Zhejiang Weixing will offset losses from the drop in Zhejiang Weixing's long position.| Nanjing Putian vs. China State Construction | Nanjing Putian vs. Huafa Industrial Co | Nanjing Putian vs. China International Capital | Nanjing Putian vs. Kweichow Moutai Co |
| Zhejiang Weixing vs. PetroChina Co Ltd | Zhejiang Weixing vs. China State Construction | Zhejiang Weixing vs. China Mobile Limited | Zhejiang Weixing vs. Industrial and Commercial |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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