Correlation Between Nanjing Putian and Shenzhen Changfang
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Shenzhen Changfang Light, you can compare the effects of market volatilities on Nanjing Putian and Shenzhen Changfang 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 Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Shenzhen Changfang.
Diversification Opportunities for Nanjing Putian and Shenzhen Changfang
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nanjing and Shenzhen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light 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 Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Nanjing Putian and Shenzhen Changfang
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.15 times more return on investment than Shenzhen Changfang. However, Nanjing Putian is 1.15 times more volatile than Shenzhen Changfang Light. It trades about 0.18 of its potential returns per unit of risk. Shenzhen Changfang Light is currently generating about 0.11 per unit of risk. If you would invest 199.00 in Nanjing Putian Telecommunications on November 2, 2024 and sell it today you would earn a total of 189.00 from holding Nanjing Putian Telecommunications or generate 94.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Shenzhen Changfang Light
Performance |
Timeline |
Nanjing Putian Telec |
Shenzhen Changfang Light |
Nanjing Putian and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanjing Putian and Shenzhen Changfang
The main advantage of trading using opposite Nanjing Putian and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Shenzhen Changfang 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 Changfang will offset losses from the drop in Shenzhen Changfang's long position.Nanjing Putian vs. Shanghai Ziyan Foods | Nanjing Putian vs. Easyhome New Retail | Nanjing Putian vs. Anhui Deli Household | Nanjing Putian vs. New Hope Dairy |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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