Correlation Between Linedata Services and Nanjing Panda
Can any of the company-specific risk be diversified away by investing in both Linedata Services and Nanjing Panda 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 Linedata Services and Nanjing Panda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and Nanjing Panda Electronics, you can compare the effects of market volatilities on Linedata Services and Nanjing Panda 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 Linedata Services with a short position of Nanjing Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Nanjing Panda.
Diversification Opportunities for Linedata Services and Nanjing Panda
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Linedata and Nanjing is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and Nanjing Panda Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Panda Electronics and Linedata Services 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 Linedata Services SA are associated (or correlated) with Nanjing Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Panda Electronics has no effect on the direction of Linedata Services i.e., Linedata Services and Nanjing Panda go up and down completely randomly.
Pair Corralation between Linedata Services and Nanjing Panda
Assuming the 90 days trading horizon Linedata Services is expected to generate 1.32 times less return on investment than Nanjing Panda. But when comparing it to its historical volatility, Linedata Services SA is 3.7 times less risky than Nanjing Panda. It trades about 0.07 of its potential returns per unit of risk. Nanjing Panda Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Nanjing Panda Electronics on October 23, 2024 and sell it today you would lose (6.00) from holding Nanjing Panda Electronics or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Linedata Services SA vs. Nanjing Panda Electronics
Performance |
| Timeline |
| Linedata Services |
| Nanjing Panda Electronics |
Linedata Services and Nanjing Panda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Nanjing Panda
The main advantage of trading using opposite Linedata Services and Nanjing Panda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, Nanjing Panda 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 Panda will offset losses from the drop in Nanjing Panda's long position.| Linedata Services vs. Gaming and Leisure | Linedata Services vs. SEI INVESTMENTS | Linedata Services vs. PENN NATL GAMING | Linedata Services vs. DETALION GAMES SA |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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