Correlation Between Nanjing Putian and Leaguer Shenzhen
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Leaguer Shenzhen MicroElectronics, you can compare the effects of market volatilities on Nanjing Putian and Leaguer Shenzhen 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 Leaguer Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Leaguer Shenzhen.
Diversification Opportunities for Nanjing Putian and Leaguer Shenzhen
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Leaguer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Leaguer Shenzhen MicroElectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaguer Shenzhen Mic 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 Leaguer Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaguer Shenzhen Mic has no effect on the direction of Nanjing Putian i.e., Nanjing Putian and Leaguer Shenzhen go up and down completely randomly.
Pair Corralation between Nanjing Putian and Leaguer Shenzhen
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to under-perform the Leaguer Shenzhen. In addition to that, Nanjing Putian is 2.02 times more volatile than Leaguer Shenzhen MicroElectronics. It trades about -0.08 of its total potential returns per unit of risk. Leaguer Shenzhen MicroElectronics is currently generating about -0.05 per unit of volatility. If you would invest 3,043 in Leaguer Shenzhen MicroElectronics on September 14, 2024 and sell it today you would lose (97.00) from holding Leaguer Shenzhen MicroElectronics or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Leaguer Shenzhen MicroElectron
Performance |
| Timeline |
| Nanjing Putian Telec |
| Leaguer Shenzhen Mic |
Nanjing Putian and Leaguer Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Leaguer Shenzhen
The main advantage of trading using opposite Nanjing Putian and Leaguer Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian position performs unexpectedly, Leaguer Shenzhen 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 Leaguer Shenzhen will offset losses from the drop in Leaguer Shenzhen'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 |
| Leaguer Shenzhen vs. Nanjing Putian Telecommunications | Leaguer Shenzhen vs. Tianjin Realty Development | Leaguer Shenzhen vs. Kangyue Technology Co | Leaguer Shenzhen vs. Shenzhen Hifuture Electric |
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