Correlation Between NL Industries and China Finance
Can any of the company-specific risk be diversified away by investing in both NL Industries and China Finance 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 NL Industries and China Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and China Finance, you can compare the effects of market volatilities on NL Industries and China Finance 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 NL Industries with a short position of China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and China Finance.
Diversification Opportunities for NL Industries and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NL Industries and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and China Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance and NL Industries 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 NL Industries are associated (or correlated) with China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance has no effect on the direction of NL Industries i.e., NL Industries and China Finance go up and down completely randomly.
Pair Corralation between NL Industries and China Finance
If you would invest 800.00 in NL Industries on September 24, 2024 and sell it today you would lose (5.00) from holding NL Industries or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
NL Industries vs. China Finance
Performance |
| Timeline |
| NL Industries |
| China Finance |
NL Industries and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and China Finance
The main advantage of trading using opposite NL Industries and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries position performs unexpectedly, China Finance 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 China Finance will offset losses from the drop in China Finance's long position.| NL Industries vs. International Consolidated Companies | NL Industries vs. Frontera Group | NL Industries vs. All American Pet | NL Industries vs. XCPCNL Business Services |
| China Finance vs. Visa Class A | China Finance vs. Diamond Hill Investment | China Finance vs. Distoken Acquisition | China Finance vs. AllianceBernstein Holding LP |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |