Correlation Between Changjiang Publishing and Ningbo Jintian
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By analyzing existing cross correlation between Changjiang Publishing Media and Ningbo Jintian Copper, you can compare the effects of market volatilities on Changjiang Publishing and Ningbo Jintian 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 Changjiang Publishing with a short position of Ningbo Jintian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Ningbo Jintian.
Diversification Opportunities for Changjiang Publishing and Ningbo Jintian
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Changjiang and Ningbo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Ningbo Jintian Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jintian Copper and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with Ningbo Jintian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jintian Copper has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Ningbo Jintian go up and down completely randomly.
Pair Corralation between Changjiang Publishing and Ningbo Jintian
Assuming the 90 days trading horizon Changjiang Publishing is expected to generate 5.65 times less return on investment than Ningbo Jintian. But when comparing it to its historical volatility, Changjiang Publishing Media is 1.22 times less risky than Ningbo Jintian. It trades about 0.02 of its potential returns per unit of risk. Ningbo Jintian Copper is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Ningbo Jintian Copper on October 18, 2024 and sell it today you would earn a total of 121.00 from holding Ningbo Jintian Copper or generate 25.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Publishing Media vs. Ningbo Jintian Copper
Performance |
| Timeline |
| Changjiang Publishing |
| Ningbo Jintian Copper |
Changjiang Publishing and Ningbo Jintian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Publishing and Ningbo Jintian
The main advantage of trading using opposite Changjiang Publishing and Ningbo Jintian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, Ningbo Jintian 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 Ningbo Jintian will offset losses from the drop in Ningbo Jintian's long position.The idea behind Changjiang Publishing Media and Ningbo Jintian Copper 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.
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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.
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