Correlation Between Aba Chemicals and Fujian Newland
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By analyzing existing cross correlation between Aba Chemicals Corp and Fujian Newland Computer, you can compare the effects of market volatilities on Aba Chemicals and Fujian Newland 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 Aba Chemicals with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Fujian Newland.
Diversification Opportunities for Aba Chemicals and Fujian Newland
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and Fujian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Fujian Newland go up and down completely randomly.
Pair Corralation between Aba Chemicals and Fujian Newland
Assuming the 90 days trading horizon Aba Chemicals is expected to generate 1.65 times less return on investment than Fujian Newland. In addition to that, Aba Chemicals is 1.41 times more volatile than Fujian Newland Computer. It trades about 0.02 of its total potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.04 per unit of volatility. If you would invest 1,685 in Fujian Newland Computer on September 12, 2024 and sell it today you would earn a total of 477.00 from holding Fujian Newland Computer or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Fujian Newland Computer
Performance |
| Timeline |
| Aba Chemicals Corp |
| Fujian Newland Computer |
Aba Chemicals and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Fujian Newland
The main advantage of trading using opposite Aba Chemicals and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Fujian Newland vs. Gansu Jiu Steel | Fujian Newland vs. Shandong Mining Machinery | Fujian Newland vs. Aba Chemicals Corp | Fujian Newland vs. BlueFocus Communication Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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