Correlation Between Fujian Nanwang and Hefei Metalforming
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By analyzing existing cross correlation between Fujian Nanwang Environment and Hefei Metalforming Mach, you can compare the effects of market volatilities on Fujian Nanwang and Hefei Metalforming 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 Fujian Nanwang with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Nanwang and Hefei Metalforming.
Diversification Opportunities for Fujian Nanwang and Hefei Metalforming
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Hefei is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Nanwang Environment and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Fujian Nanwang 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 Fujian Nanwang Environment are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Fujian Nanwang i.e., Fujian Nanwang and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Fujian Nanwang and Hefei Metalforming
Assuming the 90 days trading horizon Fujian Nanwang Environment is expected to generate 0.43 times more return on investment than Hefei Metalforming. However, Fujian Nanwang Environment is 2.31 times less risky than Hefei Metalforming. It trades about 0.17 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about -0.2 per unit of risk. If you would invest 1,218 in Fujian Nanwang Environment on September 27, 2024 and sell it today you would earn a total of 48.00 from holding Fujian Nanwang Environment or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Nanwang Environment vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Fujian Nanwang Envir |
| Hefei Metalforming Mach |
Fujian Nanwang and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Nanwang and Hefei Metalforming
The main advantage of trading using opposite Fujian Nanwang and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Nanwang position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Fujian Nanwang vs. Zijin Mining Group | Fujian Nanwang vs. Wanhua Chemical Group | Fujian Nanwang vs. Baoshan Iron Steel | Fujian Nanwang vs. Shandong Gold Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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