Correlation Between Nine Dragons and PERSOL HOLDINGS
Can any of the company-specific risk be diversified away by investing in both Nine Dragons and PERSOL HOLDINGS 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 Nine Dragons and PERSOL HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Dragons Paper and PERSOL HOLDINGS LTD, you can compare the effects of market volatilities on Nine Dragons and PERSOL HOLDINGS 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 Nine Dragons with a short position of PERSOL HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and PERSOL HOLDINGS.
Diversification Opportunities for Nine Dragons and PERSOL HOLDINGS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and PERSOL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and PERSOL HOLDINGS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PERSOL HOLDINGS LTD and Nine Dragons 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 Nine Dragons Paper are associated (or correlated) with PERSOL HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PERSOL HOLDINGS LTD has no effect on the direction of Nine Dragons i.e., Nine Dragons and PERSOL HOLDINGS go up and down completely randomly.
Pair Corralation between Nine Dragons and PERSOL HOLDINGS
Assuming the 90 days horizon Nine Dragons Paper is expected to generate 1.42 times more return on investment than PERSOL HOLDINGS. However, Nine Dragons is 1.42 times more volatile than PERSOL HOLDINGS LTD. It trades about -0.09 of its potential returns per unit of risk. PERSOL HOLDINGS LTD is currently generating about -0.16 per unit of risk. If you would invest 39.00 in Nine Dragons Paper on August 30, 2024 and sell it today you would lose (2.00) from holding Nine Dragons Paper or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nine Dragons Paper vs. PERSOL HOLDINGS LTD
Performance |
| Timeline |
| Nine Dragons Paper |
| PERSOL HOLDINGS LTD |
Nine Dragons and PERSOL HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and PERSOL HOLDINGS
The main advantage of trading using opposite Nine Dragons and PERSOL HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons position performs unexpectedly, PERSOL HOLDINGS 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 PERSOL HOLDINGS will offset losses from the drop in PERSOL HOLDINGS's long position.| Nine Dragons vs. TFS FINANCIAL | Nine Dragons vs. Webster Financial | Nine Dragons vs. STORE ELECTRONIC | Nine Dragons vs. STMicroelectronics NV |
| PERSOL HOLDINGS vs. Recruit Holdings Co | PERSOL HOLDINGS vs. Randstad NV | PERSOL HOLDINGS vs. TRINET GROUP INC | PERSOL HOLDINGS vs. TONGDAO LIEPGR DL 0001 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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