Correlation Between Changchun Faway and Nancal Energy
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By analyzing existing cross correlation between Changchun Faway Automobile and Nancal Energy Saving Tech, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of Nancal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Nancal Energy.
Diversification Opportunities for Changchun Faway and Nancal Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Nancal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile 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 Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and Nancal Energy go up and down completely randomly.
Pair Corralation between Changchun Faway and Nancal Energy
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.63 times more return on investment than Nancal Energy. However, Changchun Faway Automobile is 1.58 times less risky than Nancal Energy. It trades about 0.02 of its potential returns per unit of risk. Nancal Energy Saving Tech is currently generating about -0.01 per unit of risk. If you would invest 936.00 in Changchun Faway Automobile on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Changchun Faway Automobile or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Nancal Energy Saving Tech
Performance |
| Timeline |
| Changchun Faway Auto |
| Nancal Energy Saving |
Changchun Faway and Nancal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Nancal Energy
The main advantage of trading using opposite Changchun Faway and Nancal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. Shenzhen Zhongzhuang Construction | Changchun Faway vs. Kuangda Technology Group | Changchun Faway vs. Glodon Software Co | Changchun Faway vs. Hubei Forbon Technology |
| Nancal Energy vs. Chengdu Kanghua Biological | Nancal Energy vs. Beijing Wantai Biological | Nancal Energy vs. Suzhou Novoprotein Scientific | Nancal Energy vs. Aluminum Corp of |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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