Correlation Between NBTM New and Shenzhen Noposion
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By analyzing existing cross correlation between NBTM New Materials and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on NBTM New and Shenzhen Noposion 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 NBTM New with a short position of Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBTM New and Shenzhen Noposion.
Diversification Opportunities for NBTM New and Shenzhen Noposion
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBTM and Shenzhen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NBTM New Materials and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion and NBTM New 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 NBTM New Materials are associated (or correlated) with Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of NBTM New i.e., NBTM New and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between NBTM New and Shenzhen Noposion
Assuming the 90 days trading horizon NBTM New Materials is expected to generate 1.0 times more return on investment than Shenzhen Noposion. However, NBTM New Materials is 1.0 times less risky than Shenzhen Noposion. It trades about 0.38 of its potential returns per unit of risk. Shenzhen Noposion Agrochemicals is currently generating about -0.09 per unit of risk. If you would invest 1,538 in NBTM New Materials on November 8, 2024 and sell it today you would earn a total of 295.00 from holding NBTM New Materials or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBTM New Materials vs. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| NBTM New Materials |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Shenzhen Noposion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
NBTM New and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBTM New and Shenzhen Noposion
The main advantage of trading using opposite NBTM New and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBTM New position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion's long position.The idea behind NBTM New Materials and Shenzhen Noposion Agrochemicals 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.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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