Correlation Between China Nonferrous and Time Publishing

Can any of the company-specific risk be diversified away by investing in both China Nonferrous and Time Publishing 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 China Nonferrous and Time Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Nonferrous Metal and Time Publishing and, you can compare the effects of market volatilities on China Nonferrous and Time Publishing 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 China Nonferrous with a short position of Time Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Nonferrous and Time Publishing.

Diversification Opportunities for China Nonferrous and Time Publishing

0.66

Correlation Coefficient

China Nonferrous  Time Publishing

Poor diversification

The 3 months correlation between China and Time is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding China Nonferrous Metal and Time Publishing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Time Publishing and China 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 China Nonferrous Metal are associated (or correlated) with Time Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Time Publishing has no effect on the direction of China Nonferrous i.e., China Nonferrous and Time Publishing go up and down completely randomly.

Pair Corralation between China Nonferrous and Time Publishing

Assuming the 90 days trading horizon China Nonferrous Metal is expected to generate 1.24 times more return on investment than Time Publishing. However, China Nonferrous is 1.24 times more volatile than Time Publishing and. It trades about 0.17 of its potential returns per unit of risk. Time Publishing and is currently generating about 0.14 per unit of risk. If you would invest  394.00  in China Nonferrous Metal on September 16, 2024 and sell it today you would earn a total of  122.00  from holding China Nonferrous Metal or generate 30.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

China Nonferrous Metal  vs.  Time Publishing and

China Nonferrous Metal

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Nonferrous Metal are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China Nonferrous sustained solid returns over the last few months and may actually be approaching a breakup point.

Time Publishing

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Time Publishing and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Time Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Nonferrous and Time Publishing

The main advantage of trading using opposite China Nonferrous and Time Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Nonferrous position performs unexpectedly, Time Publishing 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 Time Publishing will offset losses from the drop in Time Publishing's long position.

The idea behind China Nonferrous Metal and Time Publishing and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.