Correlation Between New China and Kunwu Jiuding
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By analyzing existing cross correlation between New China Life and Kunwu Jiuding Investment, you can compare the effects of market volatilities on New China and Kunwu Jiuding 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 Kunwu Jiuding. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Kunwu Jiuding.
Diversification Opportunities for New China and Kunwu Jiuding
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Kunwu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Kunwu Jiuding Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunwu Jiuding Investment 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 Kunwu Jiuding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunwu Jiuding Investment has no effect on the direction of New China i.e., New China and Kunwu Jiuding go up and down completely randomly.
Pair Corralation between New China and Kunwu Jiuding
Assuming the 90 days trading horizon New China Life is expected to generate 0.78 times more return on investment than Kunwu Jiuding. However, New China Life is 1.28 times less risky than Kunwu Jiuding. It trades about 0.12 of its potential returns per unit of risk. Kunwu Jiuding Investment is currently generating about 0.05 per unit of risk. If you would invest 3,255 in New China Life on August 29, 2024 and sell it today you would earn a total of 1,437 from holding New China Life or generate 44.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Kunwu Jiuding Investment
Performance |
| Timeline |
| New China Life |
| Kunwu Jiuding Investment |
New China and Kunwu Jiuding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Kunwu Jiuding
The main advantage of trading using opposite New China and Kunwu Jiuding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Kunwu Jiuding 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 Kunwu Jiuding will offset losses from the drop in Kunwu Jiuding'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 |
| Kunwu Jiuding vs. Heilongjiang Transport Development | Kunwu Jiuding vs. CITIC Metal Co | Kunwu Jiuding vs. Anhui Gujing Distillery | Kunwu Jiuding vs. Anhui Transport Consulting |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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