Correlation Between New China and Inner Mongolia
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By analyzing existing cross correlation between New China Life and Inner Mongolia Furui, you can compare the effects of market volatilities on New China and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Inner Mongolia.
Diversification Opportunities for New China and Inner Mongolia
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between New and Inner is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Inner Mongolia Furui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Furui 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Furui has no effect on the direction of New China i.e., New China and Inner Mongolia go up and down completely randomly.
Pair Corralation between New China and Inner Mongolia
Assuming the 90 days trading horizon New China Life is expected to generate 0.69 times more return on investment than Inner Mongolia. However, New China Life is 1.45 times less risky than Inner Mongolia. It trades about -0.03 of its potential returns per unit of risk. Inner Mongolia Furui is currently generating about -0.23 per unit of risk. If you would invest 4,865 in New China Life on August 29, 2024 and sell it today you would lose (173.00) from holding New China Life or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Inner Mongolia Furui
Performance |
| Timeline |
| New China Life |
| Inner Mongolia Furui |
New China and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Inner Mongolia
The main advantage of trading using opposite New China and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| New China vs. Eastroc Beverage Group | New China vs. Hangzhou Coco Healthcare | New China vs. Dazhong Transportation Group | New China vs. CICC Fund Management |
| Inner Mongolia vs. YLZ Information Tech | Inner Mongolia vs. Hangzhou Gisway Information | Inner Mongolia vs. Jinling Hotel Corp | Inner Mongolia vs. Eastern Communications Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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