Correlation Between Nanjing OLO and Sinosteel Luonai
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By analyzing existing cross correlation between Nanjing OLO Home and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Nanjing OLO and Sinosteel Luonai 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 Nanjing OLO with a short position of Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing OLO and Sinosteel Luonai.
Diversification Opportunities for Nanjing OLO and Sinosteel Luonai
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Sinosteel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing OLO Home and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat and Nanjing OLO 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 Nanjing OLO Home are associated (or correlated) with Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Nanjing OLO i.e., Nanjing OLO and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Nanjing OLO and Sinosteel Luonai
Assuming the 90 days trading horizon Nanjing OLO is expected to generate 1.17 times less return on investment than Sinosteel Luonai. But when comparing it to its historical volatility, Nanjing OLO Home is 1.24 times less risky than Sinosteel Luonai. It trades about 0.18 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Sinosteel Luonai Materials on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Sinosteel Luonai Materials or generate 39.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing OLO Home vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Nanjing OLO Home |
| Sinosteel Luonai Mat |
Nanjing OLO and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing OLO and Sinosteel Luonai
The main advantage of trading using opposite Nanjing OLO and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing OLO position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai's long position.| Nanjing OLO vs. Zhejiang JIULI Hi tech | Nanjing OLO vs. Shuhua Sports Co | Nanjing OLO vs. Sichuan Fulin Transportation | Nanjing OLO vs. Dazhong Transportation Group |
| Sinosteel Luonai vs. Nanjing OLO Home | Sinosteel Luonai vs. Linewell Software Co | Sinosteel Luonai vs. Zoy Home Furnishing | Sinosteel Luonai vs. Northking Information 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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