Correlation Between Nuode Investment and Xiandai Investment
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By analyzing existing cross correlation between Nuode Investment Co and Xiandai Investment Co, you can compare the effects of market volatilities on Nuode Investment and Xiandai Investment 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 Nuode Investment with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuode Investment and Xiandai Investment.
Diversification Opportunities for Nuode Investment and Xiandai Investment
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuode and Xiandai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nuode Investment Co and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Nuode Investment 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 Nuode Investment Co are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Nuode Investment i.e., Nuode Investment and Xiandai Investment go up and down completely randomly.
Pair Corralation between Nuode Investment and Xiandai Investment
Assuming the 90 days trading horizon Nuode Investment Co is expected to generate 1.86 times more return on investment than Xiandai Investment. However, Nuode Investment is 1.86 times more volatile than Xiandai Investment Co. It trades about 0.17 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.19 per unit of risk. If you would invest 302.00 in Nuode Investment Co on September 6, 2024 and sell it today you would earn a total of 144.00 from holding Nuode Investment Co or generate 47.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nuode Investment Co vs. Xiandai Investment Co
Performance |
Timeline |
Nuode Investment |
Xiandai Investment |
Nuode Investment and Xiandai Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuode Investment and Xiandai Investment
The main advantage of trading using opposite Nuode Investment and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuode Investment position performs unexpectedly, Xiandai Investment 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.Nuode Investment vs. Shandong Hongchuang Aluminum | Nuode Investment vs. Zhejiang Yayi Metal | Nuode Investment vs. Tsingtao Brewery Co | Nuode Investment vs. CITIC Metal Co |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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