Correlation Between Nasdaq and Wenzhou Hongfeng
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By analyzing existing cross correlation between Nasdaq Inc and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Nasdaq and Wenzhou Hongfeng 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 Nasdaq with a short position of Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Wenzhou Hongfeng.
Diversification Opportunities for Nasdaq and Wenzhou Hongfeng
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Wenzhou is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Nasdaq i.e., Nasdaq and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Nasdaq and Wenzhou Hongfeng
Given the investment horizon of 90 days Nasdaq is expected to generate 1.7 times less return on investment than Wenzhou Hongfeng. But when comparing it to its historical volatility, Nasdaq Inc is 2.73 times less risky than Wenzhou Hongfeng. It trades about 0.26 of its potential returns per unit of risk. Wenzhou Hongfeng Electrical is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Wenzhou Hongfeng Electrical on September 13, 2024 and sell it today you would earn a total of 112.00 from holding Wenzhou Hongfeng Electrical or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Nasdaq Inc vs. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Nasdaq Inc |
| Wenzhou Hongfeng Ele |
Nasdaq and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Wenzhou Hongfeng
The main advantage of trading using opposite Nasdaq and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.The idea behind Nasdaq Inc and Wenzhou Hongfeng Electrical 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.| Wenzhou Hongfeng vs. Industrial and Commercial | Wenzhou Hongfeng vs. Agricultural Bank of | Wenzhou Hongfeng vs. China Construction Bank | Wenzhou Hongfeng vs. Bank of China |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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