Correlation Between NBTM New and Anhui Huaheng
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By analyzing existing cross correlation between NBTM New Materials and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on NBTM New and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBTM New and Anhui Huaheng.
Diversification Opportunities for NBTM New and Anhui Huaheng
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NBTM and Anhui is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NBTM New Materials and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of NBTM New i.e., NBTM New and Anhui Huaheng go up and down completely randomly.
Pair Corralation between NBTM New and Anhui Huaheng
Assuming the 90 days trading horizon NBTM New Materials is expected to generate 1.1 times more return on investment than Anhui Huaheng. However, NBTM New is 1.1 times more volatile than Anhui Huaheng Biotechnology. It trades about 0.06 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.05 per unit of risk. If you would invest 1,014 in NBTM New Materials on November 9, 2024 and sell it today you would earn a total of 1,002 from holding NBTM New Materials or generate 98.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBTM New Materials vs. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| NBTM New Materials |
Risk-Adjusted Performance
Modest
Weak | Strong |
| Anhui Huaheng Biotec |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
NBTM New and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBTM New and Anhui Huaheng
The main advantage of trading using opposite NBTM New and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBTM New position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng's long position.The idea behind NBTM New Materials and Anhui Huaheng Biotechnology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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