Correlation Between Nanjing Putian and Beijing YanDong
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Beijing YanDong MicroElectronic, you can compare the effects of market volatilities on Nanjing Putian and Beijing YanDong 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 Beijing YanDong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Beijing YanDong.
Diversification Opportunities for Nanjing Putian and Beijing YanDong
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanjing and Beijing is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Beijing YanDong MicroElectroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing YanDong Micr 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 Beijing YanDong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing YanDong Micr has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Beijing YanDong go up and down completely randomly.
Pair Corralation between Nanjing Putian and Beijing YanDong
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.09 times more return on investment than Beijing YanDong. However, Nanjing Putian is 1.09 times more volatile than Beijing YanDong MicroElectronic. It trades about 0.08 of its potential returns per unit of risk. Beijing YanDong MicroElectronic is currently generating about 0.06 per unit of risk. If you would invest 206.00 in Nanjing Putian Telecommunications on December 11, 2024 and sell it today you would earn a total of 176.00 from holding Nanjing Putian Telecommunications or generate 85.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Beijing YanDong MicroElectroni
Performance |
| Timeline |
| Nanjing Putian Telec |
| Beijing YanDong Micr |
Nanjing Putian and Beijing YanDong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Beijing YanDong
The main advantage of trading using opposite Nanjing Putian and Beijing YanDong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Beijing YanDong 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 Beijing YanDong will offset losses from the drop in Beijing YanDong's long position.| Nanjing Putian vs. China State Construction | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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