Correlation Between Suzhou Novoprotein and CICT Mobile
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By analyzing existing cross correlation between Suzhou Novoprotein Scientific and CICT Mobile Communication, you can compare the effects of market volatilities on Suzhou Novoprotein and CICT Mobile 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 Suzhou Novoprotein with a short position of CICT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Novoprotein and CICT Mobile.
Diversification Opportunities for Suzhou Novoprotein and CICT Mobile
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Suzhou and CICT is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Novoprotein Scientific and CICT Mobile Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICT Mobile Communication and Suzhou Novoprotein 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 Suzhou Novoprotein Scientific are associated (or correlated) with CICT Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICT Mobile Communication has no effect on the direction of Suzhou Novoprotein i.e., Suzhou Novoprotein and CICT Mobile go up and down completely randomly.
Pair Corralation between Suzhou Novoprotein and CICT Mobile
Assuming the 90 days trading horizon Suzhou Novoprotein Scientific is expected to under-perform the CICT Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Novoprotein Scientific is 1.06 times less risky than CICT Mobile. The stock trades about -0.05 of its potential returns per unit of risk. The CICT Mobile Communication is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 560.00 in CICT Mobile Communication on November 19, 2024 and sell it today you would earn a total of 49.00 from holding CICT Mobile Communication or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Novoprotein Scientific vs. CICT Mobile Communication
Performance |
| Timeline |
| Suzhou Novoprotein |
| CICT Mobile Communication |
Suzhou Novoprotein and CICT Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Novoprotein and CICT Mobile
The main advantage of trading using opposite Suzhou Novoprotein and CICT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Novoprotein position performs unexpectedly, CICT Mobile 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 CICT Mobile will offset losses from the drop in CICT Mobile's long position.The idea behind Suzhou Novoprotein Scientific and CICT Mobile Communication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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