Correlation Between China Telecom and Namchow Food
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By analyzing existing cross correlation between China Telecom Corp and Namchow Food Group, you can compare the effects of market volatilities on China Telecom and Namchow Food 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 China Telecom with a short position of Namchow Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and Namchow Food.
Diversification Opportunities for China Telecom and Namchow Food
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Namchow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp and Namchow Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namchow Food Group and China Telecom 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 China Telecom Corp are associated (or correlated) with Namchow Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namchow Food Group has no effect on the direction of China Telecom i.e., China Telecom and Namchow Food go up and down completely randomly.
Pair Corralation between China Telecom and Namchow Food
Assuming the 90 days trading horizon China Telecom is expected to generate 3.24 times less return on investment than Namchow Food. But when comparing it to its historical volatility, China Telecom Corp is 1.02 times less risky than Namchow Food. It trades about 0.02 of its potential returns per unit of risk. Namchow Food Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,598 in Namchow Food Group on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Namchow Food Group or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.37% |
| Values | Daily Returns |
China Telecom Corp vs. Namchow Food Group
Performance |
| Timeline |
| China Telecom Corp |
| Namchow Food Group |
China Telecom and Namchow Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and Namchow Food
The main advantage of trading using opposite China Telecom and Namchow Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom position performs unexpectedly, Namchow Food 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 Namchow Food will offset losses from the drop in Namchow Food's long position.| China Telecom vs. Anji Foodstuff Co | China Telecom vs. Peoples Insurance of | China Telecom vs. New Hope Dairy | China Telecom vs. Ligao Foods CoLtd |
| Namchow Food vs. China Petroleum Chemical | Namchow Food vs. PetroChina Co Ltd | Namchow Food vs. China State Construction | Namchow Food vs. China Railway Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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