Correlation Between Nien Made and Fusheng Precision
Can any of the company-specific risk be diversified away by investing in both Nien Made and Fusheng Precision at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nien Made and Fusheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nien Made Enterprise and Fusheng Precision Co, you can compare the effects of market volatilities on Nien Made and Fusheng Precision 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 Nien Made with a short position of Fusheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nien Made and Fusheng Precision.
Diversification Opportunities for Nien Made and Fusheng Precision
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nien and Fusheng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nien Made Enterprise and Fusheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusheng Precision and Nien Made 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 Nien Made Enterprise are associated (or correlated) with Fusheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusheng Precision has no effect on the direction of Nien Made i.e., Nien Made and Fusheng Precision go up and down completely randomly.
Pair Corralation between Nien Made and Fusheng Precision
If you would invest 22,200 in Fusheng Precision Co on November 3, 2024 and sell it today you would earn a total of 10,650 from holding Fusheng Precision Co or generate 47.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.42% |
| Values | Daily Returns |
Nien Made Enterprise vs. Fusheng Precision Co
Performance |
| Timeline |
| Nien Made Enterprise |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fusheng Precision |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Nien Made and Fusheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nien Made and Fusheng Precision
The main advantage of trading using opposite Nien Made and Fusheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nien Made position performs unexpectedly, Fusheng Precision 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 Fusheng Precision will offset losses from the drop in Fusheng Precision's long position.The idea behind Nien Made Enterprise and Fusheng Precision 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.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 Stocks Directory module to find actively traded stocks across global markets.
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