Correlation Between Nanjing Panda and WIZZ AIR
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda and WIZZ AIR 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 WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on Nanjing Panda and WIZZ AIR 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 WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and WIZZ AIR.
Diversification Opportunities for Nanjing Panda and WIZZ AIR
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanjing and WIZZ is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of Nanjing Panda i.e., Nanjing Panda and WIZZ AIR go up and down completely randomly.
Pair Corralation between Nanjing Panda and WIZZ AIR
Assuming the 90 days horizon Nanjing Panda Electronics is expected to generate 1.78 times more return on investment than WIZZ AIR. However, Nanjing Panda is 1.78 times more volatile than WIZZ AIR HLDGUNSPADR4. It trades about 0.03 of its potential returns per unit of risk. WIZZ AIR HLDGUNSPADR4 is currently generating about -0.02 per unit of risk. If you would invest 36.00 in Nanjing Panda Electronics on October 13, 2024 and sell it today you would lose (3.00) from holding Nanjing Panda Electronics or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. WIZZ AIR HLDGUNSPADR4
Performance |
| Timeline |
| Nanjing Panda Electronics |
| WIZZ AIR HLDGUNSPADR4 |
Nanjing Panda and WIZZ AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and WIZZ AIR
The main advantage of trading using opposite Nanjing Panda and WIZZ AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda position performs unexpectedly, WIZZ AIR 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 WIZZ AIR will offset losses from the drop in WIZZ AIR's long position.| Nanjing Panda vs. Computershare Limited | Nanjing Panda vs. BOSTON BEER A | Nanjing Panda vs. Charter Communications | Nanjing Panda vs. Highlight Communications AG |
| WIZZ AIR vs. Nanjing Panda Electronics | WIZZ AIR vs. STORE ELECTRONIC | WIZZ AIR vs. Burlington Stores | WIZZ AIR vs. BJs Wholesale Club |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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