Correlation Between Zhongtong Guomai and Nanjing Putian
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Zhongtong Guomai and Nanjing Putian 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 Zhongtong Guomai with a short position of Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Nanjing Putian.
Diversification Opportunities for Zhongtong Guomai and Nanjing Putian
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and Nanjing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Nanjing Putian go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Nanjing Putian
Assuming the 90 days trading horizon Zhongtong Guomai is expected to generate 4.86 times less return on investment than Nanjing Putian. In addition to that, Zhongtong Guomai is 1.01 times more volatile than Nanjing Putian Telecommunications. It trades about 0.04 of its total potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.2 per unit of volatility. If you would invest 390.00 in Nanjing Putian Telecommunications on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Nanjing Putian Telecommunications or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Nanjing Putian Telec |
Zhongtong Guomai and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Nanjing Putian
The main advantage of trading using opposite Zhongtong Guomai and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.| Zhongtong Guomai vs. China Petroleum Chemical | Zhongtong Guomai vs. PetroChina Co Ltd | Zhongtong Guomai vs. China State Construction | Zhongtong Guomai vs. China Railway Group |
| Nanjing Putian vs. Puyang Huicheng Electronic | Nanjing Putian vs. Jiangyin Jianghua Microelectronics | Nanjing Putian vs. Qumei Furniture Group | Nanjing Putian vs. Fiberhome Telecommunication Technologies |
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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