Correlation Between Nanjing Putian and Nanjing Xinjiekou
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Nanjing Xinjiekou Department, you can compare the effects of market volatilities on Nanjing Putian and Nanjing Xinjiekou 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 Nanjing Xinjiekou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Nanjing Xinjiekou.
Diversification Opportunities for Nanjing Putian and Nanjing Xinjiekou
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Nanjing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Nanjing Xinjiekou Department in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Xinjiekou 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 Nanjing Xinjiekou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Xinjiekou has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Nanjing Xinjiekou go up and down completely randomly.
Pair Corralation between Nanjing Putian and Nanjing Xinjiekou
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.64 times more return on investment than Nanjing Xinjiekou. However, Nanjing Putian is 1.64 times more volatile than Nanjing Xinjiekou Department. It trades about 0.18 of its potential returns per unit of risk. Nanjing Xinjiekou Department is currently generating about 0.04 per unit of risk. If you would invest 174.00 in Nanjing Putian Telecommunications on August 29, 2024 and sell it today you would earn a total of 265.00 from holding Nanjing Putian Telecommunications or generate 152.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Nanjing Xinjiekou Department
Performance |
| Timeline |
| Nanjing Putian Telec |
| Nanjing Xinjiekou |
Nanjing Putian and Nanjing Xinjiekou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Nanjing Xinjiekou
The main advantage of trading using opposite Nanjing Putian and Nanjing Xinjiekou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Nanjing Xinjiekou 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 Nanjing Xinjiekou will offset losses from the drop in Nanjing Xinjiekou'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 |
| Nanjing Xinjiekou vs. Peoples Insurance of | Nanjing Xinjiekou vs. Nanjing Putian Telecommunications | Nanjing Xinjiekou vs. Allwin Telecommunication Co | Nanjing Xinjiekou vs. Jilin Jlu Communication |
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