Correlation Between Nantex Industry and China Petrochemical
Can any of the company-specific risk be diversified away by investing in both Nantex Industry and China Petrochemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nantex Industry and China Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nantex Industry Co and China Petrochemical Development, you can compare the effects of market volatilities on Nantex Industry and China Petrochemical 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 Nantex Industry with a short position of China Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantex Industry and China Petrochemical.
Diversification Opportunities for Nantex Industry and China Petrochemical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nantex and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nantex Industry Co and China Petrochemical Developmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petrochemical and Nantex Industry 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 Nantex Industry Co are associated (or correlated) with China Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petrochemical has no effect on the direction of Nantex Industry i.e., Nantex Industry and China Petrochemical go up and down completely randomly.
Pair Corralation between Nantex Industry and China Petrochemical
Assuming the 90 days trading horizon Nantex Industry Co is expected to generate 0.72 times more return on investment than China Petrochemical. However, Nantex Industry Co is 1.38 times less risky than China Petrochemical. It trades about -0.08 of its potential returns per unit of risk. China Petrochemical Development is currently generating about -0.08 per unit of risk. If you would invest 3,425 in Nantex Industry Co on October 28, 2024 and sell it today you would lose (80.00) from holding Nantex Industry Co or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantex Industry Co vs. China Petrochemical Developmen
Performance |
| Timeline |
| Nantex Industry |
| China Petrochemical |
Nantex Industry and China Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantex Industry and China Petrochemical
The main advantage of trading using opposite Nantex Industry and China Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantex Industry position performs unexpectedly, China Petrochemical 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 China Petrochemical will offset losses from the drop in China Petrochemical's long position.| Nantex Industry vs. International CSRC Investment | Nantex Industry vs. TSRC Corp | Nantex Industry vs. Ruentex Industries | Nantex Industry vs. Cheng Shin Rubber |
| China Petrochemical vs. Nan Ya Plastics | China Petrochemical vs. Formosa Chemicals Fibre | China Petrochemical vs. China Steel Corp | China Petrochemical vs. Formosa Petrochemical Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |