Correlation Between New China and Milkyway Chemical
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By analyzing existing cross correlation between New China Life and Milkyway Chemical Supply, you can compare the effects of market volatilities on New China and Milkyway Chemical 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 Milkyway Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Milkyway Chemical.
Diversification Opportunities for New China and Milkyway Chemical
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Milkyway is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Milkyway Chemical Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milkyway Chemical Supply 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 Milkyway Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milkyway Chemical Supply has no effect on the direction of New China i.e., New China and Milkyway Chemical go up and down completely randomly.
Pair Corralation between New China and Milkyway Chemical
Assuming the 90 days trading horizon New China Life is expected to generate 1.71 times more return on investment than Milkyway Chemical. However, New China is 1.71 times more volatile than Milkyway Chemical Supply. It trades about 0.03 of its potential returns per unit of risk. Milkyway Chemical Supply is currently generating about -0.04 per unit of risk. If you would invest 4,830 in New China Life on September 5, 2024 and sell it today you would earn a total of 47.00 from holding New China Life or generate 0.97% 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. Milkyway Chemical Supply
Performance |
| Timeline |
| New China Life |
| Milkyway Chemical Supply |
New China and Milkyway Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Milkyway Chemical
The main advantage of trading using opposite New China and Milkyway Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Milkyway Chemical 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 Milkyway Chemical will offset losses from the drop in Milkyway Chemical's long position.| New China vs. Xiwang Foodstuffs Co | New China vs. Unigroup Guoxin Microelectronics | New China vs. Puyang Huicheng Electronic | New China vs. Youyou Foods Co |
| Milkyway Chemical vs. New China Life | Milkyway Chemical vs. Ming Yang Smart | Milkyway Chemical vs. 159681 | Milkyway Chemical vs. 159005 |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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