Correlation Between Chlitina Holding and Nan Liu

Can any of the company-specific risk be diversified away by investing in both Chlitina Holding and Nan Liu 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 Chlitina Holding and Nan Liu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chlitina Holding and Nan Liu Enterprise, you can compare the effects of market volatilities on Chlitina Holding and Nan Liu 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 Chlitina Holding with a short position of Nan Liu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chlitina Holding and Nan Liu.

Diversification Opportunities for Chlitina Holding and Nan Liu

0.75

Correlation Coefficient

Chlitina Holding  Nan Liu

Poor diversification

The 3 months correlation between Chlitina and Nan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chlitina Holding and Nan Liu Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Liu Enterprise and Chlitina Holding 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 Chlitina Holding are associated (or correlated) with Nan Liu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Liu Enterprise has no effect on the direction of Chlitina Holding i.e., Chlitina Holding and Nan Liu go up and down completely randomly.

Pair Corralation between Chlitina Holding and Nan Liu

Assuming the 90 days trading horizon Chlitina Holding is expected to under-perform the Nan Liu. In addition to that, Chlitina Holding is 2.23 times more volatile than Nan Liu Enterprise. It trades about -0.14 of its total potential returns per unit of risk. Nan Liu Enterprise is currently generating about -0.17 per unit of volatility. If you would invest  7,060  in Nan Liu Enterprise on September 24, 2024 and sell it today you would lose (730.00) from holding Nan Liu Enterprise or give up 10.34% of portfolio value over 90 days.

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

Chlitina Holding  vs.  Nan Liu Enterprise

Chlitina Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chlitina Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Nan Liu Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nan Liu Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chlitina Holding and Nan Liu

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

The idea behind Chlitina Holding and Nan Liu Enterprise 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.