Correlation Between Nantong Haixing and Dongnan Electronics
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By analyzing existing cross correlation between Nantong Haixing Electronics and Dongnan Electronics Co, you can compare the effects of market volatilities on Nantong Haixing and Dongnan Electronics 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 Nantong Haixing with a short position of Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Haixing and Dongnan Electronics.
Diversification Opportunities for Nantong Haixing and Dongnan Electronics
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nantong and Dongnan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Haixing Electronics and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics and Nantong Haixing 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 Nantong Haixing Electronics are associated (or correlated) with Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of Nantong Haixing i.e., Nantong Haixing and Dongnan Electronics go up and down completely randomly.
Pair Corralation between Nantong Haixing and Dongnan Electronics
Assuming the 90 days trading horizon Nantong Haixing Electronics is expected to under-perform the Dongnan Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Nantong Haixing Electronics is 1.71 times less risky than Dongnan Electronics. The stock trades about 0.0 of its potential returns per unit of risk. The Dongnan Electronics Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Dongnan Electronics Co on August 26, 2024 and sell it today you would lose (117.00) from holding Dongnan Electronics Co or give up 4.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantong Haixing Electronics vs. Dongnan Electronics Co
Performance |
| Timeline |
| Nantong Haixing Elec |
| Dongnan Electronics |
Nantong Haixing and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantong Haixing and Dongnan Electronics
The main advantage of trading using opposite Nantong Haixing and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Haixing position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| Nantong Haixing vs. Kweichow Moutai Co | Nantong Haixing vs. Shenzhen Mindray Bio Medical | Nantong Haixing vs. Jiangsu Pacific Quartz | Nantong Haixing vs. G bits Network Technology |
| Dongnan Electronics vs. Kweichow Moutai Co | Dongnan Electronics vs. Shenzhen Mindray Bio Medical | Dongnan Electronics vs. Jiangsu Pacific Quartz | Dongnan Electronics vs. G bits Network 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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