Correlation Between China International and Fujian Newland
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By analyzing existing cross correlation between China International Capital and Fujian Newland Computer, you can compare the effects of market volatilities on China International and Fujian Newland 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 International with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Fujian Newland.
Diversification Opportunities for China International and Fujian Newland
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Fujian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and China International 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 International Capital are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of China International i.e., China International and Fujian Newland go up and down completely randomly.
Pair Corralation between China International and Fujian Newland
Assuming the 90 days trading horizon China International is expected to generate 12.43 times less return on investment than Fujian Newland. But when comparing it to its historical volatility, China International Capital is 1.43 times less risky than Fujian Newland. It trades about 0.02 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,877 in Fujian Newland Computer on September 1, 2024 and sell it today you would earn a total of 260.00 from holding Fujian Newland Computer or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Fujian Newland Computer
Performance |
| Timeline |
| China International |
| Fujian Newland Computer |
China International and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Fujian Newland
The main advantage of trading using opposite China International and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| China International vs. Offshore Oil Engineering | China International vs. Guocheng Mining Co | China International vs. Zhengzhou Coal Mining | China International vs. Xiandai Investment Co |
| Fujian Newland vs. Ming Yang Smart | Fujian Newland vs. 159681 | Fujian Newland vs. 159005 | Fujian Newland vs. Loctek Ergonomic Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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