Correlation Between Niutech Environment and Kangping Technology
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By analyzing existing cross correlation between Niutech Environment Technology and Kangping Technology Co, you can compare the effects of market volatilities on Niutech Environment and Kangping Technology 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 Niutech Environment with a short position of Kangping Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niutech Environment and Kangping Technology.
Diversification Opportunities for Niutech Environment and Kangping Technology
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Niutech and Kangping is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Niutech Environment Technology and Kangping Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangping Technology and Niutech Environment 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 Niutech Environment Technology are associated (or correlated) with Kangping Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangping Technology has no effect on the direction of Niutech Environment i.e., Niutech Environment and Kangping Technology go up and down completely randomly.
Pair Corralation between Niutech Environment and Kangping Technology
Assuming the 90 days trading horizon Niutech Environment is expected to generate 29.5 times less return on investment than Kangping Technology. In addition to that, Niutech Environment is 1.15 times more volatile than Kangping Technology Co. It trades about 0.01 of its total potential returns per unit of risk. Kangping Technology Co is currently generating about 0.24 per unit of volatility. If you would invest 2,129 in Kangping Technology Co on September 1, 2024 and sell it today you would earn a total of 251.00 from holding Kangping Technology Co or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Niutech Environment Technology vs. Kangping Technology Co
Performance |
| Timeline |
| Niutech Environment |
| Kangping Technology |
Niutech Environment and Kangping Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niutech Environment and Kangping Technology
The main advantage of trading using opposite Niutech Environment and Kangping Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niutech Environment position performs unexpectedly, Kangping Technology 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 Kangping Technology will offset losses from the drop in Kangping Technology's long position.The idea behind Niutech Environment Technology and Kangping Technology Co 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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