Correlation Between Marssenger Kitchenware and Nanjing OLO
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By analyzing existing cross correlation between Marssenger Kitchenware Co and Nanjing OLO Home, you can compare the effects of market volatilities on Marssenger Kitchenware and Nanjing OLO 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 Marssenger Kitchenware with a short position of Nanjing OLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marssenger Kitchenware and Nanjing OLO.
Diversification Opportunities for Marssenger Kitchenware and Nanjing OLO
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marssenger and Nanjing is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Marssenger Kitchenware Co and Nanjing OLO Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing OLO Home and Marssenger Kitchenware 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 Marssenger Kitchenware Co are associated (or correlated) with Nanjing OLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing OLO Home has no effect on the direction of Marssenger Kitchenware i.e., Marssenger Kitchenware and Nanjing OLO go up and down completely randomly.
Pair Corralation between Marssenger Kitchenware and Nanjing OLO
Assuming the 90 days trading horizon Marssenger Kitchenware Co is expected to generate 1.73 times more return on investment than Nanjing OLO. However, Marssenger Kitchenware is 1.73 times more volatile than Nanjing OLO Home. It trades about 0.19 of its potential returns per unit of risk. Nanjing OLO Home is currently generating about 0.27 per unit of risk. If you would invest 1,372 in Marssenger Kitchenware Co on September 4, 2024 and sell it today you would earn a total of 178.00 from holding Marssenger Kitchenware Co or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marssenger Kitchenware Co vs. Nanjing OLO Home
Performance |
| Timeline |
| Marssenger Kitchenware |
| Nanjing OLO Home |
Marssenger Kitchenware and Nanjing OLO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marssenger Kitchenware and Nanjing OLO
The main advantage of trading using opposite Marssenger Kitchenware and Nanjing OLO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marssenger Kitchenware position performs unexpectedly, Nanjing OLO 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 OLO will offset losses from the drop in Nanjing OLO's long position.The idea behind Marssenger Kitchenware Co and Nanjing OLO Home 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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