Correlation Between Nanjing Putian and Gan Yuan
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Gan Yuan Foods, you can compare the effects of market volatilities on Nanjing Putian and Gan Yuan 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 Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Gan Yuan.
Diversification Opportunities for Nanjing Putian and Gan Yuan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nanjing and Gan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods 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 Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Gan Yuan go up and down completely randomly.
Pair Corralation between Nanjing Putian and Gan Yuan
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.25 times more return on investment than Gan Yuan. However, Nanjing Putian is 1.25 times more volatile than Gan Yuan Foods. It trades about 0.37 of its potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.24 per unit of risk. If you would invest 199.00 in Nanjing Putian Telecommunications on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Nanjing Putian Telecommunications or generate 131.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Gan Yuan Foods
Performance |
| Timeline |
| Nanjing Putian Telec |
| Gan Yuan Foods |
Nanjing Putian and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Gan Yuan
The main advantage of trading using opposite Nanjing Putian and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan's long position.| Nanjing Putian vs. Agricultural Bank of | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Postal Savings Bank | Nanjing Putian vs. Bank of Communications |
| Gan Yuan vs. Beijing Wantai Biological | Gan Yuan vs. Aluminum Corp of | Gan Yuan vs. COL Digital Publishing | Gan Yuan vs. Shaanxi Meineng Clean |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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