Correlation Between Puyang Huicheng and Nanjing Putian
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By analyzing existing cross correlation between Puyang Huicheng Electronic and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Puyang Huicheng and Nanjing Putian 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 Puyang Huicheng with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puyang Huicheng and Nanjing Putian.
Diversification Opportunities for Puyang Huicheng and Nanjing Putian
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Puyang and Nanjing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Puyang Huicheng Electronic and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec and Puyang Huicheng 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 Puyang Huicheng Electronic are associated (or correlated) with Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Puyang Huicheng i.e., Puyang Huicheng and Nanjing Putian go up and down completely randomly.
Pair Corralation between Puyang Huicheng and Nanjing Putian
Assuming the 90 days trading horizon Puyang Huicheng is expected to generate 1.97 times less return on investment than Nanjing Putian. But when comparing it to its historical volatility, Puyang Huicheng Electronic is 1.65 times less risky than Nanjing Putian. It trades about 0.17 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Nanjing Putian Telecommunications on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Nanjing Putian Telecommunications or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puyang Huicheng Electronic vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Puyang Huicheng Elec |
| Nanjing Putian Telec |
Puyang Huicheng and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puyang Huicheng and Nanjing Putian
The main advantage of trading using opposite Puyang Huicheng and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puyang Huicheng position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.| Puyang Huicheng vs. Zijin Mining Group | Puyang Huicheng vs. Wanhua Chemical Group | Puyang Huicheng vs. Baoshan Iron Steel | Puyang Huicheng vs. Shandong Gold Mining |
| Nanjing Putian vs. Puyang Huicheng Electronic | Nanjing Putian vs. Jiangyin Jianghua Microelectronics | Nanjing Putian vs. Qumei Furniture Group | Nanjing Putian vs. Fiberhome Telecommunication Technologies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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