Correlation Between Chongqing Road and Nancal Energy
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By analyzing existing cross correlation between Chongqing Road Bridge and Nancal Energy Saving Tech, you can compare the effects of market volatilities on Chongqing Road and Nancal Energy 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 Chongqing Road with a short position of Nancal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Nancal Energy.
Diversification Opportunities for Chongqing Road and Nancal Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Nancal is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Nancal Energy Saving Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nancal Energy Saving and Chongqing Road 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 Chongqing Road Bridge are associated (or correlated) with Nancal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nancal Energy Saving has no effect on the direction of Chongqing Road i.e., Chongqing Road and Nancal Energy go up and down completely randomly.
Pair Corralation between Chongqing Road and Nancal Energy
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to under-perform the Nancal Energy. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Road Bridge is 1.9 times less risky than Nancal Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Nancal Energy Saving Tech is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,058 in Nancal Energy Saving Tech on September 1, 2024 and sell it today you would earn a total of 911.00 from holding Nancal Energy Saving Tech or generate 44.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Nancal Energy Saving Tech
Performance |
| Timeline |
| Chongqing Road Bridge |
| Nancal Energy Saving |
Chongqing Road and Nancal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Nancal Energy
The main advantage of trading using opposite Chongqing Road and Nancal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Nancal Energy 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 Nancal Energy will offset losses from the drop in Nancal Energy's long position.| Chongqing Road vs. Orinko Advanced Plastics | Chongqing Road vs. Levima Advanced Materials | Chongqing Road vs. Super Dragon Engineering Plastics | Chongqing Road vs. Hengkang Medical Group |
| Nancal Energy vs. Cultural Investment Holdings | Nancal Energy vs. Gome Telecom Equipment | Nancal Energy vs. Bus Online Co | Nancal Energy vs. Holitech Technology Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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