Correlation Between Nine Dragons and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both Nine Dragons 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 Nine Dragons and Nine Dragons 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 Nine Dragons Paper, you can compare the effects of market volatilities on Nine Dragons 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 Nine Dragons with a short position of Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Nine Dragons.
Diversification Opportunities for Nine Dragons and Nine Dragons
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nine and Nine is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper 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 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 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 Nine Dragons i.e., Nine Dragons and Nine Dragons go up and down completely randomly.
Pair Corralation between Nine Dragons and Nine Dragons
Assuming the 90 days horizon Nine Dragons is expected to generate 1.22 times less return on investment than Nine Dragons. In addition to that, Nine Dragons is 1.41 times more volatile than Nine Dragons Paper. It trades about 0.06 of its total potential returns per unit of risk. Nine Dragons Paper is currently generating about 0.1 per unit of volatility. If you would invest 37.00 in Nine Dragons Paper on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Nine Dragons Paper or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Dragons Paper vs. Nine Dragons Paper
Performance |
| Timeline |
| Nine Dragons Paper |
| Nine Dragons Paper |
Nine Dragons and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and Nine Dragons
The main advantage of trading using opposite Nine Dragons and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons 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.| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Nine Dragons Paper | Nine Dragons vs. Klabin Sa A |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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