Correlation Between Chengdu Kanghua and Nanjing Putian
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Chengdu Kanghua 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 Chengdu Kanghua with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Nanjing Putian.
Diversification Opportunities for Chengdu Kanghua and Nanjing Putian
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chengdu and Nanjing is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological 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 Chengdu Kanghua 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 Chengdu Kanghua Biological 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 Chengdu Kanghua i.e., Chengdu Kanghua and Nanjing Putian go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Nanjing Putian
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 0.58 times more return on investment than Nanjing Putian. However, Chengdu Kanghua Biological is 1.73 times less risky than Nanjing Putian. It trades about -0.23 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about -0.36 per unit of risk. If you would invest 5,800 in Chengdu Kanghua Biological on October 9, 2024 and sell it today you would lose (520.00) from holding Chengdu Kanghua Biological or give up 8.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Nanjing Putian Telec |
Chengdu Kanghua and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Nanjing Putian
The main advantage of trading using opposite Chengdu Kanghua and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua 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.| Chengdu Kanghua vs. Jiangsu GDK Biotechnology | Chengdu Kanghua vs. Anhui Huaheng Biotechnology | Chengdu Kanghua vs. Shanghai Jinfeng Wine | Chengdu Kanghua vs. Guangdong Jingyi Metal |
| Nanjing Putian vs. Chengtun Mining Group | Nanjing Putian vs. Lotus Health Group | Nanjing Putian vs. Shanghai Yanpu Metal | Nanjing Putian vs. Beijing HuaYuanYiTong Thermal |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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