Correlation Between Nanjing Putian and Allied Machinery
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Allied Machinery Co, you can compare the effects of market volatilities on Nanjing Putian and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Allied Machinery.
Diversification Opportunities for Nanjing Putian and Allied Machinery
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nanjing and Allied is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Allied Machinery go up and down completely randomly.
Pair Corralation between Nanjing Putian and Allied Machinery
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.71 times more return on investment than Allied Machinery. However, Nanjing Putian is 1.71 times more volatile than Allied Machinery Co. It trades about 0.21 of its potential returns per unit of risk. Allied Machinery Co is currently generating about 0.24 per unit of risk. If you would invest 362.00 in Nanjing Putian Telecommunications on August 25, 2024 and sell it today you would earn a total of 75.00 from holding Nanjing Putian Telecommunications or generate 20.72% 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. Allied Machinery Co
Performance |
| Timeline |
| Nanjing Putian Telec |
| Allied Machinery |
Nanjing Putian and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Allied Machinery
The main advantage of trading using opposite Nanjing Putian and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Nanjing Putian vs. Ming Yang Smart | Nanjing Putian vs. 159005 | Nanjing Putian vs. Loctek Ergonomic Technology | Nanjing Putian vs. Xiamen East Asia |
| Allied Machinery vs. Zhejiang Qianjiang Motorcycle | Allied Machinery vs. Zotye Automobile Co | Allied Machinery vs. Fujian Longzhou Transportation | Allied Machinery vs. Songz Automobile Air |
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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