Correlation Between Nantex Industry and International CSRC
Can any of the company-specific risk be diversified away by investing in both Nantex Industry and International CSRC 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 International CSRC 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 International CSRC Investment, you can compare the effects of market volatilities on Nantex Industry and International CSRC 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 International CSRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantex Industry and International CSRC.
Diversification Opportunities for Nantex Industry and International CSRC
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nantex and International is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nantex Industry Co and International CSRC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International CSRC 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 International CSRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International CSRC has no effect on the direction of Nantex Industry i.e., Nantex Industry and International CSRC go up and down completely randomly.
Pair Corralation between Nantex Industry and International CSRC
Assuming the 90 days trading horizon Nantex Industry Co is expected to generate 1.19 times more return on investment than International CSRC. However, Nantex Industry is 1.19 times more volatile than International CSRC Investment. It trades about -0.06 of its potential returns per unit of risk. International CSRC Investment is currently generating about -0.15 per unit of risk. If you would invest 3,925 in Nantex Industry Co on October 26, 2024 and sell it today you would lose (580.00) from holding Nantex Industry Co or give up 14.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantex Industry Co vs. International CSRC Investment
Performance |
| Timeline |
| Nantex Industry |
| International CSRC |
Nantex Industry and International CSRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantex Industry and International CSRC
The main advantage of trading using opposite Nantex Industry and International CSRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantex Industry position performs unexpectedly, International CSRC 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 International CSRC will offset losses from the drop in International CSRC'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 |
| International CSRC vs. Cheng Shin Rubber | International CSRC vs. TSRC Corp | International CSRC vs. Taiwan Cement Corp | International CSRC vs. China Steel Chemical |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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