Correlation Between Nantex Industry and Nan Pao
Can any of the company-specific risk be diversified away by investing in both Nantex Industry and Nan Pao 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 Nan Pao 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 Nan Pao Resins, you can compare the effects of market volatilities on Nantex Industry and Nan Pao 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 Nan Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantex Industry and Nan Pao.
Diversification Opportunities for Nantex Industry and Nan Pao
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nantex and Nan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nantex Industry Co and Nan Pao Resins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Pao Resins 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 Nan Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Pao Resins has no effect on the direction of Nantex Industry i.e., Nantex Industry and Nan Pao go up and down completely randomly.
Pair Corralation between Nantex Industry and Nan Pao
Assuming the 90 days trading horizon Nantex Industry Co is expected to under-perform the Nan Pao. In addition to that, Nantex Industry is 1.1 times more volatile than Nan Pao Resins. It trades about -0.08 of its total potential returns per unit of risk. Nan Pao Resins is currently generating about 0.17 per unit of volatility. If you would invest 31,100 in Nan Pao Resins on October 28, 2024 and sell it today you would earn a total of 1,300 from holding Nan Pao Resins or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantex Industry Co vs. Nan Pao Resins
Performance |
| Timeline |
| Nantex Industry |
| Nan Pao Resins |
Nantex Industry and Nan Pao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantex Industry and Nan Pao
The main advantage of trading using opposite Nantex Industry and Nan Pao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantex Industry position performs unexpectedly, Nan Pao 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 Nan Pao will offset losses from the drop in Nan Pao'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 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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