Correlation Between Contemporary Amperex and Fujian Nanwang
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By analyzing existing cross correlation between Contemporary Amperex Technology and Fujian Nanwang Environment, you can compare the effects of market volatilities on Contemporary Amperex and Fujian Nanwang 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 Contemporary Amperex with a short position of Fujian Nanwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Fujian Nanwang.
Diversification Opportunities for Contemporary Amperex and Fujian Nanwang
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Contemporary and Fujian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and Fujian Nanwang Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Nanwang Envir and Contemporary Amperex 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 Contemporary Amperex Technology are associated (or correlated) with Fujian Nanwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Nanwang Envir has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and Fujian Nanwang go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Fujian Nanwang
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to under-perform the Fujian Nanwang. But the stock apears to be less risky and, when comparing its historical volatility, Contemporary Amperex Technology is 1.77 times less risky than Fujian Nanwang. The stock trades about -0.08 of its potential returns per unit of risk. The Fujian Nanwang Environment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,149 in Fujian Nanwang Environment on January 27, 2025 and sell it today you would lose (7.00) from holding Fujian Nanwang Environment or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Fujian Nanwang Environment
Performance |
| Timeline |
| Contemporary Amperex |
| Fujian Nanwang Envir |
Contemporary Amperex and Fujian Nanwang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Fujian Nanwang
The main advantage of trading using opposite Contemporary Amperex and Fujian Nanwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, Fujian Nanwang 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 Nanwang will offset losses from the drop in Fujian Nanwang's long position.The idea behind Contemporary Amperex Technology and Fujian Nanwang Environment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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