Correlation Between New China and Fujian Rongji
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By analyzing existing cross correlation between New China Life and Fujian Rongji Software, you can compare the effects of market volatilities on New China and Fujian Rongji 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 New China with a short position of Fujian Rongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Fujian Rongji.
Diversification Opportunities for New China and Fujian Rongji
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Fujian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Fujian Rongji Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Rongji Software and New China 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 New China Life are associated (or correlated) with Fujian Rongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Rongji Software has no effect on the direction of New China i.e., New China and Fujian Rongji go up and down completely randomly.
Pair Corralation between New China and Fujian Rongji
Assuming the 90 days trading horizon New China Life is expected to under-perform the Fujian Rongji. But the stock apears to be less risky and, when comparing its historical volatility, New China Life is 1.42 times less risky than Fujian Rongji. The stock trades about -0.04 of its potential returns per unit of risk. The Fujian Rongji Software is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Fujian Rongji Software on September 12, 2024 and sell it today you would earn a total of 29.00 from holding Fujian Rongji Software or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
New China Life vs. Fujian Rongji Software
Performance |
| Timeline |
| New China Life |
| Fujian Rongji Software |
New China and Fujian Rongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Fujian Rongji
The main advantage of trading using opposite New China and Fujian Rongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Fujian Rongji 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 Fujian Rongji will offset losses from the drop in Fujian Rongji's long position.| New China vs. HeBei Jinniu Chemical | New China vs. Zhejiang Construction Investment | New China vs. Lianhe Chemical Technology | New China vs. Nuode Investment Co |
| Fujian Rongji vs. Beijing Wandong Medical | Fujian Rongji vs. Sinomach Automobile Co | Fujian Rongji vs. Guangdong Shenglu Telecommunication | Fujian Rongji vs. Ningbo MedicalSystem Biotechnology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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