Correlation Between Nanning Chemical and Guangdong Electric
Specify exactly 2 symbols:
By analyzing existing cross correlation between Nanning Chemical Industry and Guangdong Electric Power, you can compare the effects of market volatilities on Nanning Chemical and Guangdong Electric 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 Nanning Chemical with a short position of Guangdong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanning Chemical and Guangdong Electric.
Diversification Opportunities for Nanning Chemical and Guangdong Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nanning and Guangdong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nanning Chemical Industry and Guangdong Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Electric Power and Nanning Chemical 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 Nanning Chemical Industry are associated (or correlated) with Guangdong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Electric Power has no effect on the direction of Nanning Chemical i.e., Nanning Chemical and Guangdong Electric go up and down completely randomly.
Pair Corralation between Nanning Chemical and Guangdong Electric
Assuming the 90 days trading horizon Nanning Chemical Industry is expected to generate 4.31 times more return on investment than Guangdong Electric. However, Nanning Chemical is 4.31 times more volatile than Guangdong Electric Power. It trades about 0.13 of its potential returns per unit of risk. Guangdong Electric Power is currently generating about -0.06 per unit of risk. If you would invest 1,690 in Nanning Chemical Industry on November 7, 2024 and sell it today you would earn a total of 72.00 from holding Nanning Chemical Industry or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanning Chemical Industry vs. Guangdong Electric Power
Performance |
| Timeline |
| Nanning Chemical Industry |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Electric Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nanning Chemical and Guangdong Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanning Chemical and Guangdong Electric
The main advantage of trading using opposite Nanning Chemical and Guangdong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanning Chemical position performs unexpectedly, Guangdong Electric 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 Guangdong Electric will offset losses from the drop in Guangdong Electric's long position.The idea behind Nanning Chemical Industry and Guangdong Electric Power 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |