Correlation Between Nanjing Putian and Xinjiang Communications
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Xinjiang Communications Construction, you can compare the effects of market volatilities on Nanjing Putian and Xinjiang Communications 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Xinjiang Communications.
Diversification Opportunities for Nanjing Putian and Xinjiang Communications
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanjing and Xinjiang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Nanjing Putian and Xinjiang Communications
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 2.35 times more return on investment than Xinjiang Communications. However, Nanjing Putian is 2.35 times more volatile than Xinjiang Communications Construction. It trades about 0.34 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.08 per unit of risk. If you would invest 318.00 in Nanjing Putian Telecommunications on November 7, 2024 and sell it today you would earn a total of 70.00 from holding Nanjing Putian Telecommunications or generate 22.01% 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. Xinjiang Communications Constr
Performance |
| Timeline |
| Nanjing Putian Telec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xinjiang Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nanjing Putian and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Xinjiang Communications
The main advantage of trading using opposite Nanjing Putian and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.The idea behind Nanjing Putian Telecommunications and Xinjiang Communications Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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