Correlation Between New China and Ming Yang
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By analyzing existing cross correlation between New China Life and Ming Yang Smart, you can compare the effects of market volatilities on New China and Ming Yang 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 Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Ming Yang.
Diversification Opportunities for New China and Ming Yang
Very weak diversification
The 3 months correlation between New and Ming is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart 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 Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of New China i.e., New China and Ming Yang go up and down completely randomly.
Pair Corralation between New China and Ming Yang
Assuming the 90 days trading horizon New China Life is expected to generate 0.98 times more return on investment than Ming Yang. However, New China Life is 1.02 times less risky than Ming Yang. It trades about 0.05 of its potential returns per unit of risk. Ming Yang Smart is currently generating about -0.07 per unit of risk. If you would invest 2,932 in New China Life on October 30, 2024 and sell it today you would earn a total of 1,831 from holding New China Life or generate 62.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
New China Life vs. Ming Yang Smart
Performance |
Timeline |
New China Life |
Ming Yang Smart |
New China and Ming Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New China and Ming Yang
The main advantage of trading using opposite New China and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang's long position.New China vs. Citic Offshore Helicopter | New China vs. Northern United Publishing | New China vs. Tibet Huayu Mining | New China vs. Xinjiang Baodi Mining |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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