Correlation Between Nanjing Panda and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda and MAG SILVER 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 Nanjing Panda and MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanjing Panda Electronics and MAG SILVER, you can compare the effects of market volatilities on Nanjing Panda and MAG SILVER 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 Nanjing Panda with a short position of MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and MAG SILVER.
Diversification Opportunities for Nanjing Panda and MAG SILVER
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nanjing and MAG is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and Nanjing Panda 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 Nanjing Panda Electronics are associated (or correlated) with MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of Nanjing Panda i.e., Nanjing Panda and MAG SILVER go up and down completely randomly.
Pair Corralation between Nanjing Panda and MAG SILVER
Assuming the 90 days horizon Nanjing Panda Electronics is expected to generate 2.59 times more return on investment than MAG SILVER. However, Nanjing Panda is 2.59 times more volatile than MAG SILVER. It trades about 0.02 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.02 per unit of risk. If you would invest 44.00 in Nanjing Panda Electronics on October 29, 2024 and sell it today you would lose (11.00) from holding Nanjing Panda Electronics or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. MAG SILVER
Performance |
| Timeline |
| Nanjing Panda Electronics |
| MAG SILVER |
Nanjing Panda and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and MAG SILVER
The main advantage of trading using opposite Nanjing Panda and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda position performs unexpectedly, MAG SILVER 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 MAG SILVER will offset losses from the drop in MAG SILVER's long position.| Nanjing Panda vs. MCEWEN MINING INC | Nanjing Panda vs. Nordic Semiconductor ASA | Nanjing Panda vs. UNIVERSAL MUSIC GROUP | Nanjing Panda vs. CHINA TONTINE WINES |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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