Correlation Between Mondi PLC and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both Mondi PLC and Nine Dragons 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 Mondi PLC and Nine Dragons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondi PLC ADR and Nine Dragons Paper, you can compare the effects of market volatilities on Mondi PLC and Nine Dragons 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 Mondi PLC with a short position of Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondi PLC and Nine Dragons.
Diversification Opportunities for Mondi PLC and Nine Dragons
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mondi and Nine is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mondi PLC ADR and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper and Mondi PLC 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 Mondi PLC ADR are associated (or correlated) with Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of Mondi PLC i.e., Mondi PLC and Nine Dragons go up and down completely randomly.
Pair Corralation between Mondi PLC and Nine Dragons
If you would invest 46.00 in Nine Dragons Paper on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Nine Dragons Paper or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mondi PLC ADR vs. Nine Dragons Paper
Performance |
| Timeline |
| Mondi PLC ADR |
| Nine Dragons Paper |
Mondi PLC and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondi PLC and Nine Dragons
The main advantage of trading using opposite Mondi PLC and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondi PLC position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.The idea behind Mondi PLC ADR and Nine Dragons Paper 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.| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Klabin Sa A | Nine Dragons vs. Nine Dragons Paper |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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