Correlation Between Nanjing Panda and Renesas Electronics
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics, you can compare the effects of market volatilities on Nanjing Panda and Renesas Electronics 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 Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and Renesas Electronics.
Diversification Opportunities for Nanjing Panda and Renesas Electronics
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nanjing and Renesas is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics 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 Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of Nanjing Panda i.e., Nanjing Panda and Renesas Electronics go up and down completely randomly.
Pair Corralation between Nanjing Panda and Renesas Electronics
If you would invest 1,226 in Renesas Electronics on October 16, 2024 and sell it today you would lose (3.00) from holding Renesas Electronics or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. Renesas Electronics
Performance |
| Timeline |
| Nanjing Panda Electronics |
| Renesas Electronics |
Nanjing Panda and Renesas Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and Renesas Electronics
The main advantage of trading using opposite Nanjing Panda and Renesas Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda position performs unexpectedly, Renesas Electronics 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 Renesas Electronics will offset losses from the drop in Renesas Electronics' long position.| Nanjing Panda vs. Marie Brizard Wine | Nanjing Panda vs. ITALIAN WINE BRANDS | Nanjing Panda vs. VIRGIN WINES UK | Nanjing Panda vs. CEOTRONICS |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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