Correlation Between Tongling Nonferrous and Bright Dairy
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By analyzing existing cross correlation between Tongling Nonferrous Metals and Bright Dairy Food, you can compare the effects of market volatilities on Tongling Nonferrous and Bright Dairy 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 Tongling Nonferrous with a short position of Bright Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Bright Dairy.
Diversification Opportunities for Tongling Nonferrous and Bright Dairy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongling and Bright is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Bright Dairy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Dairy Food and Tongling Nonferrous 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 Tongling Nonferrous Metals are associated (or correlated) with Bright Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Dairy Food has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Bright Dairy go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Bright Dairy
Assuming the 90 days trading horizon Tongling Nonferrous is expected to generate 5.92 times less return on investment than Bright Dairy. In addition to that, Tongling Nonferrous is 1.06 times more volatile than Bright Dairy Food. It trades about 0.01 of its total potential returns per unit of risk. Bright Dairy Food is currently generating about 0.09 per unit of volatility. If you would invest 779.00 in Bright Dairy Food on September 25, 2024 and sell it today you would earn a total of 95.00 from holding Bright Dairy Food or generate 12.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tongling Nonferrous Metals vs. Bright Dairy Food
Performance |
Timeline |
Tongling Nonferrous |
Bright Dairy Food |
Tongling Nonferrous and Bright Dairy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tongling Nonferrous and Bright Dairy
The main advantage of trading using opposite Tongling Nonferrous and Bright Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Bright Dairy 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 Bright Dairy will offset losses from the drop in Bright Dairy's long position.Tongling Nonferrous vs. Hubeiyichang Transportation Group | Tongling Nonferrous vs. Dazhong Transportation Group | Tongling Nonferrous vs. Gansu Yasheng Industrial | Tongling Nonferrous vs. Sportsoul Co Ltd |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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