Correlation Between Nanjing Panda and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on Nanjing Panda and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and INFORMATION SVC.
Diversification Opportunities for Nanjing Panda and INFORMATION SVC
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nanjing and INFORMATION is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of Nanjing Panda i.e., Nanjing Panda and INFORMATION SVC go up and down completely randomly.
Pair Corralation between Nanjing Panda and INFORMATION SVC
Assuming the 90 days horizon Nanjing Panda Electronics is expected to generate 2.5 times more return on investment than INFORMATION SVC. However, Nanjing Panda is 2.5 times more volatile than INFORMATION SVC GRP. It trades about 0.05 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about -0.03 per unit of risk. If you would invest 25.00 in Nanjing Panda Electronics on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Nanjing Panda Electronics or generate 32.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. INFORMATION SVC GRP
Performance |
| Timeline |
| Nanjing Panda Electronics |
| INFORMATION SVC GRP |
Nanjing Panda and INFORMATION SVC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and INFORMATION SVC
The main advantage of trading using opposite Nanjing Panda and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.| Nanjing Panda vs. Amphenol | Nanjing Panda vs. Hon Hai Precision | Nanjing Panda vs. Samsung SDI Co | Nanjing Panda vs. Murata Manufacturing Co |
| INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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