Correlation Between Nanjing Putian and Metro Investment
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Metro Investment Development, you can compare the effects of market volatilities on Nanjing Putian and Metro Investment 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 Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Metro Investment.
Diversification Opportunities for Nanjing Putian and Metro Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanjing and Metro is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Metro Investment go up and down completely randomly.
Pair Corralation between Nanjing Putian and Metro Investment
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 0.95 times more return on investment than Metro Investment. However, Nanjing Putian Telecommunications is 1.05 times less risky than Metro Investment. It trades about 0.03 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.01 per unit of risk. If you would invest 344.00 in Nanjing Putian Telecommunications on September 5, 2024 and sell it today you would earn a total of 115.00 from holding Nanjing Putian Telecommunications or generate 33.43% 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. Metro Investment Development
Performance |
| Timeline |
| Nanjing Putian Telec |
| Metro Investment Dev |
Nanjing Putian and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Metro Investment
The main advantage of trading using opposite Nanjing Putian and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Metro Investment 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 Metro Investment will offset losses from the drop in Metro Investment's long position.| Nanjing Putian vs. Industrial and Commercial | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Bank of China | Nanjing Putian vs. Agricultural Bank of |
| Metro Investment vs. Nanjing Putian Telecommunications | Metro Investment vs. Tianjin Realty Development | Metro Investment vs. Shenyang Huitian Thermal | Metro Investment vs. Shenzhen Changfang Light |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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