Correlation Between China Molybdenum and Nanhua Bio
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By analyzing existing cross correlation between China Molybdenum Co and Nanhua Bio Medicine, you can compare the effects of market volatilities on China Molybdenum and Nanhua Bio 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 Molybdenum with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Molybdenum and Nanhua Bio.
Diversification Opportunities for China Molybdenum and Nanhua Bio
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Nanhua is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding China Molybdenum Co and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and China Molybdenum 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 Molybdenum Co are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of China Molybdenum i.e., China Molybdenum and Nanhua Bio go up and down completely randomly.
Pair Corralation between China Molybdenum and Nanhua Bio
Assuming the 90 days trading horizon China Molybdenum Co is expected to generate 0.6 times more return on investment than Nanhua Bio. However, China Molybdenum Co is 1.68 times less risky than Nanhua Bio. It trades about 0.07 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.01 per unit of risk. If you would invest 521.00 in China Molybdenum Co on August 26, 2024 and sell it today you would earn a total of 211.00 from holding China Molybdenum Co or generate 40.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Molybdenum Co vs. Nanhua Bio Medicine
Performance |
| Timeline |
| China Molybdenum |
| Nanhua Bio Medicine |
China Molybdenum and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Molybdenum and Nanhua Bio
The main advantage of trading using opposite China Molybdenum and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Molybdenum position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| China Molybdenum vs. China National Software | China Molybdenum vs. Jiajia Food Group | China Molybdenum vs. Great Sun Foods Co | China Molybdenum vs. HaiXin Foods Co |
| Nanhua Bio vs. China State Construction | Nanhua Bio vs. Huafa Industrial Co | Nanhua Bio vs. China International Capital | Nanhua Bio vs. Kweichow Moutai Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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